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•    MONEY  AND   PROSPERITY 


BY 


C.   II.  S.  LITTLETON 


Ji. 


PUBLISHED   ISY 

THE   EASTERN    BIMETALLIC    LEAGUE 

1831  Chestnut  Street,  Philadelphia 
1898 


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Copyright,  1898, 

BY 

C.  H.  S.  Littleton. 


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g  TO    THOSE    WHO    ARE    IN    WANT 

-''  OF    THE     NECESSARIES    OF    LIFE; 

TO  THOSE  WHO   HAVE   ACQUIRED 
5*  WEALTH    AND    LOST    IT;    TO   THE 

^  PRODUCING    AND    INDUSTRIAL 

p  CLASSES   GENERALLY,  THIS   BOOK 

IS   DEDICATED. 


38925 


CONTENTS 


CHAPTER   I 

PAGE 

Value  of  Money ii 


CHAPTER   n 

The  Cost  of  Production  of  the  Material  from  which 
Money  is  made  does  not  determine  its  Value    ...   24 

CHAPTER   HI 
Importance  of  Stability  of  Value 28 

CHAPTER   IV 
The  Functions  of  Money 32 

CHAPTER  V 
Demonetization  of  Silver .35 

CHAPTER  VI 
The  Gold  Standard 54 

CHAPTER   VII 
Honest  Money 71 

CHAPTER  VIII 
Falling  Prices 81 

CHAPTER  IX 

The  Free  and  Unlimited  Coinage  of  both  Gold  and  Sil- 
ver at  the  Present  Legal  Ratio  of  Sixteen  to  One 
BY  THE  Independent  Action  of  the  United  States    .   94 

5 


INTRODUCTORY 


Since  the  demonetization  of  silver  in  1873,  no 
political  issue  has  been  so  frequently  and  thoroughly- 
discussed  as  the  money  question.  Having  its  origin 
in  the  West  and  South,  the  rising  tide  of  debate 
swept  eastward,  until  it  culminated  in  the  fiercely 
contested  campaign  of  1896.  In  this  test  of  strength 
the  advocates  of  the  gold  standard  were  accorded 
the  honors  of  an  apparent  victory ;  but  when  it  is 
remembered  that  no  less  than  six  million  five  hundred 
thousand  voters  registered  at  the  polls  their  approval 
of  bimetallism,  it  will  be  readily  seen  that  the  so- 
called  victory  cannot  in  any  sense  be  regarded  as  a 
popular  one.  Moreover,  it  must  be  admitted  that 
this  primary  trial  of  strength  has  in  no  degree  abated 
the  vigor  which  at  the  time  of  the  candidacy  of 
Hon.  William  J.  Bryan  characterized  the  efforts  of 
the  champions  of  bimetallism  to  restore  silver  to 
the  legal  ratio  of  sixteen  to  one. 

It  is  generally  admitted  that  our  present  monetary 
system  must  speedily  be  corrected.     The  advocates  of 

7 


8  INTRODUCTORY 

the  gold  standard  have  numerous  plans  to  offer,  but 
not  one  that  will  increase  the  supply  of  full  redemption 
money.  Bankers  demand  bank  issues  of  paper  money. 
Such  currency,  however,  would  be  only  credit  money. 
What  the  people  of  the  United  States  need  and  must 
have  before  general  prosperity  is  again  established,  is 
an  increase  in  the  full  legal-tender  metallic  money. 
In  order  to  secure  this  increase  bimetallists  propose 
that  our  mints  shall  again  be  opened  to  the  free, 
unlimited,  and  independent  coinage  of  both  gold  and 
silver  at  the  constitutional  ratio  of  sixteen  to  one, 
without  waiting  for  the  consent  or  co-operation  of 
other  nations. 

Money  is  a  common  medium  of  exchange  and  a 
measure  of  values.  Increasing  the  circulating  supply 
of  a  country,  the  demand  for  money  remaining  the 
same,  necessarily  decreases  the  value  of  money  by 
lessening  its  purchasing  power,  and  thus  increases 
the  price  of  goods  and  property.  If  the  supply  is 
not  increased,  in  proportion  to  the  requirements  of 
the  people  and  the  increase  of  population,  money  will 
rise  in  value, — that  is  to  say,  its  purchasing  power 
will  be  increased,  and  all  goods  and  property  will 
correspondingly  fall  in  price. 

Between  1850  and  1870  the  American  people  en- 
joyed  great   prosperity,  and  during   this   period  we 


INTRODUCTORY  9 

find  a  reduction  in  the  cost  of  many  commodities, — a 
reduction  as  great,  or  greater,  generally  speaking,  than 
that  witnessed  in  subsequent  years.  Despite  this  fact, 
however,  we  had  rising  prices  during  that  time;  while 
since  1873  general  prices  have  fallen  fifty  per  cent. 

The  creditor  classes  are  benefited  by  an  increase  in 
the  value  of  money,  and  the  producing  and  business 
classes  generally  are  benefited  by  an  increase  in  the 
value  of  the  things  for  which  money  exchanges. 
Lowering  the  cost  of  production  implies  an  increase 
of  industrial  undertakings,  more  employment,  better 
wages,  and  a  greater  demand  for  commodities.  Our 
merchants  and  tradesmen  in  every  branch  of  business 
should  feel  its  happy  effects ;  but  a  constant  fall  in 
prices  is  disastrous  to  every  branch  of  industry,  and 
to  the  debtor  class  in  particular. 

Until  rightly  settled,  the  money  question  is,  and  will 
continue  to  be,  paramount  to  all  other  political  issues. 

There  must  be  something  wrong  with  the  laws  of 
this  republic,  else  there  would  not  be  men,  women, 
and  children  starving  for  the  necessaries  of  life ;  there 
would  not  be  honest  and  willing  hands  seeking  em- 
ployment without  finding  it ;  there  would  be  no  cry 
of  distress  in  this  great  land  of  ours  if  laws  had  been 
enacted  protecting  the  interests  of  all  alike,  rather 
than  the  interests  of  the  few. 


MONEY  AND  PROSPERITY 


CHAPTER    I 

VALUE   OF   MONEY 

Man  in  supplying  most  of  his  needs  can  exercise 
some  choice  in  selection.  If  an  article  desired  be 
too  scarce  or  dear  he  can  choose  something  else,  but 
there  is  no  substitute  for  money.  No  matter  how 
high  the  value  of  money  may  be,  the  people  must 
have  it  to  procure  food,  clothing,  and  shelter. 

From  time   immemorial  mankind   has    recognized 

the    necessity  of  accepting   some    common    medium 

of  general  exchange.     Among  the  barbarians  of  the 

ancient  world  this  medium  consisted  of  horses,  cattle, 

skins,  and  weapons  of  warfare  ;  and  a  similar  method 

of  exchange  still  prevails  among  savage  races  to-day. 

We  learn   in  the  Homeric  poems  that  the  arms  of 

Diomed  were  worth  nine  oxen;   and  in  the  ancient 

German  codes  law  penalties  are  defined  as  representing 

specified  numbers  of  live-stock.    Leather  circulated  as 

money  in  Russia  during  the  time  of  Peter  the  Great. 

II 


2  MONEY   AND   PROSPERITY 

We  also  find  that  articles  of  adornment,  as  jewels  and 
the  like,  have  circulated  as  money.  Wampumpeag, 
consisting  of  beads  made  of  black  and  white  shells 
formed  into  necklaces  and  belts,  was  not  only  used  as 
currency  by  the  North  American  Indians,  but  for 
many  years  was  used  for  the  same  purpose  by  early 
white  settlers. 

The  governor  of  the  plantations  of  Virginia,  in  1618, 
ordered  that  tobacco  should  be  received  at  the  rate  of 
three  shillings  for  the  pound  weight,  and  prescribed 
for  those  who  did  not  comply  with  this  order  a  penalty 
of  three  years  at  hard  labor.  In  1732  the  Legislature, 
of  Maryland  declared  Indian  corn  and  tobacco  legal 
tender.  Platinum,  tin,  lead,  and  iron  have  also  been 
used  as  currency.  There  are,  however,  several  ob- 
jections to  the  use  of  platinum  for  money.  In  appear- 
ance it  is  inferior  to  silver,  and  the  cost  of  making  it 
into  coins  is  very  great,  owing  to  the  difficulty  of 
melting  it.  Tin  and  lead  are  too  soft;  and  coins 
made  from  iron  would  soon  lose  their  impressions 
by  rusting.  Copper  and  nickel  are  largely  used  for 
minor  coins.  Gold  and  silver  are  spoken  of  as  the 
precious  metals  because  they  are  beautiful  in  appear- 
ance, susceptible  of  good  impressions  by  mintage, 
easily  worked,  and  can  readily  be  detected  when  coun- 
terfeited; they  are  not  found  in  unlimited  quantities 


VALUE  OF   MONEY  13 

like  iron,  and  all  civilized  nations  have  become  familiar 
with  their  use  as  currency.  Money  is  a  creation  of 
law.  Congress  has  the  power  to  "  coin  money  and 
regulate  the  value  thereof,"  which  means  that  when 
money  becomes  too  dear  or  scarce  Congress  should 
coin  more  dollars,  and  if  too  cheap  or  plentiful  should 
coin  fewer. 

Man  can  satisfy  all  his  wants  only  by  his  own  labor 
or  skill  in  making  articles  or  parts  of  articles,  or  by 
rendering  a  specified  service  which  he  exchanges  for 
money.  With  the  money  thus  received  he  buys  such 
things  as  he  desires.  The  desire  to  possess  is  ever 
increasing,  and,  as  population  increases,  the  demand 
for  money  necessarily  becomes  greater  each  year. 
John  Stuart  Mill,  in  his  well  known  work  on  Political 
Economy,  says,  "  The  value  of  money  is,  to  appear- 
ance, an  expression  as  precise,  as  free  from  possibility 
of  misunderstanding,  as  any  in  science.  The  value  of  a 
thing  is  what  it  will  exchange  for ;  the  value  of  money 
is  what  money  will  exchange  for;  the  purchasing 
power  of  money.  If  prices  are  low,  money  will  buy 
much  of  other  things,  and  is  of  high  value ;  if  prices 
are  high,  it  will  buy  little  of  other  things,  and  is  of 
low  value.  The  value  of  money  is  inversely  as  general 
prices;  falling  as  they  rise,  and  rising  as  they  fall." 
Vol.  ii.,  page  25. 


14  MONEY   AND   PROSPERITY 

Again,  he  says,  "  If  the  whole  money  in  circulation 
were  doubled,  prices  would  be  doubled.  If  it  were 
only  increased  one-fourth,  prices  would  rise  one- 
fourth.  There  would  be  one-fourth  more  money,  all 
of  which  would  be  used  to  purchase  goods  of  some 
description.  When  there  had  been  time  for  the  in- 
creased supply  of  money  to  reach  all  markets,  or, 
according  to  the  conventional  metaphor,  to  permeate 
all  the  channels  of  circulation,  all  prices  would  have 
risen  one-fourth.  But  the  general  rise  of  price  is 
independent  of  this  diffusing  and  equalizing  process. 
Even  if  some  prices  were  raised  more  and  others  less, 
the  average  rise  would  be  one-fourth.  This  is  a 
necessary  consequence  of  the  fact,  that  a  fourth 
more  money  would  have  been  given  for  only  the  same 
quantity  of  goods.  General  prices,  therefore,  would 
in  any  case  be  a  fourth  higher."     Vol.  ii.,  page  29. 

A  nation  cannot  exist  without  money,  and  the 
supply  should  be  adequate  at  all  times ;  to  the  extent 
of  the  insufficiency  of  the  supply  all  industry  and 
labor  must  suffer.  Money  is  valuable  not  by  virtue 
of  being  redeemable  in  a  specified  thing,  but  because 
it  has  the  power  to  command.  If  gold  should  be 
demonetized  by  all  nations,  there  would  be  at  least 
fifty  or  sixty  years'  supply  on  hand  for  use  in  the 
arts.     What,  then,  would  become  of  its  value  ? 


VALUE  OF  MONEY  15 

All  great  wars  have  been  fought  on  a  paper  money 
currency.  During  and  after  the  Rebellion,  until  the 
resumption  of  specie  payments,  paper  money  was  the 
only  money  in  circulation  in  this  country.  Nations 
have  preferred  metallic  money,  based  on  the  auto- 
matic *  supply  of  the  mines,  though  it  leaves  them 
when  war  breaks  out.  Creditors  desire  money  based 
on  a  material  which  has  commodity  value,  regardless 
of  the  fact  that  such  value  is  given  it  by  the  fiat  of  the 
government  commanding  it  to  be  coined  into  money. 

It  is  frequently  said  "  law  cannot  create  value," 
This  is  true,  for  value  is  that  for  which  a  thing  will 
exchange, — a  mere  relation.  But  law  can  create  a 
demand  for  money  by  endowing  it  with  legal  tender 
functions,  and  commanding  it  to  be  received  for  dues 
and  debts,  both  public  and  private. 

After  the  Rebellion  the  question  as  to  whether  or 
not  the  government  had  the  power  to  create  money 


*  What  is  known  as  the  automatic  system,  or  rule,  limits  the  volume 
of  coin  put  into  circulation  by  the  quantity  of  the  metals  taken  from 
the  mines.  The  system  is  not  scientific  or  perfect.  When  the  mines 
are  abundantly  productive  more  bullion  finds  its  way  to  the  mints, 
and  when  the  output  materially  falls  off  the  annual  supply  of  coin 
necessarily  decreases.  No  nation  has  ever  had  too  much  full  legal 
tender  gold  and  silver  money,  and,  judging  from  the  past,  never  will 
have. 


1 6  MONEY  AND    PROSPERITY 

was  fully  discussed,  and  it  was  decided  by  the  Supreme 
Court  in  the  legal  tender  cases  that  the  United  States 
government  had  the  power,  according  to  the  Consti- 
tution, to  make  full  legal  tender  money  of  paper  or 
any  other  material,  and  that  the  courts  could  not 
question  monetary  laws  enacted  by  Congress. 

Money  should  not  be  confounded  with  wealth,  the 
product  of  labor,  for  money  is  essentially  a  general 
medium  of  exchange,  a  means  for  the  transmutation 
of  wealth  from  one  form  to  another.  Cheapening  or 
increasing  the  value  of  money,  the  demand  remaining 
the  same,  means  increasing  or  decreasing  the  amount 
in  circulation;  it  means  increasing  or  decreasing  the 
price  of  all  goods  and  property.  If  prices  are  high, 
money  will  not  buy  much  property  or  products  of 
labor.  If  prices  are  low,  it  will  command  much  more 
of  them.  The  amount  of  money  in  circulation,  other 
things  remaining  the  same,  fixes  prices.  More  money 
raises  prices,  less  lowers  them. 

Distinction  must  be  made  between  exchange  value 
and  value  in  use.  The  air  we  breathe  is  valuable  in 
use,  but  it  has  no  exchange  value.  Most  commodities 
have  exchange  value  and  value  in  use.  A  coat  and 
a  gold  watch  have  exchange  value  as  well  as  value  in 
use,  for  they  may  be  exchanged  for  other  objects  or 
money;   the  coat  is  useful   as  an  article  of  wearing 


VALUE   OF   MONEY  17 

apparel,  and  the  watch  to  keep  the  time  of  day. 
When  the  function  of  money  is  correctly  understood 
it  will  be  seen  that  money  cannot  possibly  have  in- 
trinsic value.  For  instance,  let  us  consider  a  gold 
brick  in  the  form  in  which  it  finds  its  way  to  the  mint. 
Viewed  merely  as  a  piece  of  metal  it  possesses  nothing 
in  itself.  It  cannot  be  used  as  a  necessary  of  life,  for 
we  can  neither  eat  nor  drink  it,  nor  will  it  of  itself 
clothe  or  shelter  us  ;  as  a  medium  of  exchange,  how- 
ever, it  will  procure  articles  which  will  administer  to 
our  physical  and  mental  requirements.  Bullion,  of 
course,  can  also  be  made  to  possess  a  certain  amount 
of  value  in  use  by  the  labor  of  man.  Thus,  suppose 
the  gold  brick  to  be  cut  into  two  equal  parts,  one  to 
be  coined  into  money  and  the  other  to  be  used  in  the 
arts.  The  pieces  of  money  coined  would  be  valuable 
only  by  reason  of  their  power  of  exchange,  while  the 
gold  used  in  the  making  of  watches,  rings,  and  other 
articles  of  jewelry  would,  by  being  of  practical  utility, 
possess  a  value  in  use.  In  other  words,  commodities 
and  property  have  both  price  and  value, — exchange 
value  and  value  in  use;  but  money  has  exchange 
value  only. 

The  value  of  gold  and  silver  bullion  depends  upon 
the  demand  for  the  metals  for  use  as  coin  and  in  the 
arts.     There  are  about  four  billion  dollars  of  gold  in 


1 8  MONEY   AND   PROSPERITY 

the  world  coined  into  money,  and  to  discontinue  its 
use  for  currency  and  throw  the  whole  amount  on  the 
market  for  use  in  the  arts  would  deprive  it  of  almost 
its  entire  value. 

David  Barbour,  in  "  The  Theory  of  Bimetalhsm," 
says,  "  Gold  and  silver  owe  almost  the  whole  of  their 
value  to  the  fact  that  they  can  be  converted  into  and 
used  as  money.  If  gold  and  silver  were  absolutely 
excluded  from  the  currency  of  the  world,  their  value 
would  be  greatly  reduced,  if  it  did  not  almost  entirely 
cease  to  exist ;  and  if  either  gold  or  silver  were  largely 
excluded  from  the  currency  of  the  world,  the  value  of 
the  metal  so  excluded  would  experience  a  very  great 
fall." — T]ie  Theory  of  Bimetallism,  chapter  ii. 

Mr.  Macleod,  in  speaking  of  intrinsic  value  in  his 
"  Theory  and  Practice  of  Banking,"  says,  "  This  un- 
happy phrase  meets  us  at  every  turn  in  economics, 
and  yet  the  slightest  reflection  will  show  that  to  define 
value  to  be  something  external,  and  then  to  be  con- 
stantly speaking  of  intrinsic  value,  are  utterly  self- 
contradictory  and  inconsistent  ideas.  Thus  over  and 
over  again  it  is  repeated  in  economical  treatises  that 
money  has  intrinsic  value,  but  that  a  bill  of  exchange 
or  bank-note  is  only  the  representative  of  value. 
Money,  no  doubt,  is  the  produce  of  labor,  but,  as 
Adam    Smith    observed,    if    it    would    exchange    for 


VALUE   OF   MONEY  19 

nothing  it  would  have  no  value ;  so,  M.  Say  says,  that 
the  value  of  gold  and  silver  consists  only  in  what 
they  will  buy.  How,  then,  can  its  value  be  intrinsic  ? 
How  can  anything  have  intrinsic  value  unless  it  has 
inside  itself  the  things  it  will  exchange  for?  '  Money 
has  intrinsic  value !'  Has  a  piece  of  money  got  the 
merchandise,  and  all  the  other  things  it  will  purchase, 
inside  itself?  Money  will  exchange  for  anything, 
corn,  houses,  horses,  carriages,  books,  etc.,  and  each 
of  these  is  the  value  of  money  with  respect  to  that 
commodity.  But  which  of  these  is  its  intrinsic  value  ? 
The  incongruity  of  these  ideas  is  so  glaring  that  it  is 
only  necessary  to  call  attention  to  it  for  it  to  be  per- 
ceived at  once.  Yet  from  the  very  beginning  of  the 
science  this  phrase  has  infested  it." — TJieory  and 
Practice  of  Banking,  page  48. 

Again,  Mr.  Macleod  says,  "  Moreover,  we  see  on 
considering  the  term  value  that  it  is  nonsense  to  speak 
of  the  representative  of  value.  Value  is  a  ratio — an 
external  relation.  What  can  be  the  representative  of 
a  ratio  or  of  an  external  relation  ?  To  say  that 
money,  because  it  is  material  and  the  produce  of 
labor,  has  intrinsic  value,  and  that  a  bank-note  is  only 
the  representative  of  value,  is  just  as  absurd  as  to  say 
that  a  wooden  yard  measure  is  intrinsic  distance,  and 
that  the  space  of  thirty-six  inches  between  two  points 


2  0  MONEY   AND   PROSPERITY 

is  representative  distance.     It  is  of  the  first  importance 
to    economic    science   to    exterminate   this    unhappy 
phrase  '  intrinsic  value,'  which  is  clearly  shown  to  be 
a  contradiction    in   terms." — TJicory  and  Practice   of 
Banking. 

Bailey,  in  his  work  on  "  The  Nature  of  Value," 
says,  "  In  the  examination  of  the  present  subject,  as 
discussed  by  those  writers  on  whose  doctrines  I  have 
ventured  to  animadvert,  I  have  been  forcibly  struck 
with  the  vagueness,  the  inconsistencies,  and  the  errors 
which  have  arisen  from  speaking  of  value  as  a  sort  of 
general  and  independent  property ;  and  I  cannot  too 
strongly  recommend  the  student  of  political  economy 
never  to  let  the  word  value  pass  before  him  without 
putting  the  question,  '  Value  in  what  ?  or  in  relation 
to  what  ?'  The  value  of  a  commodity  must  be  its 
value  in  something,  and  whenever  the  term  is  used 
with  any  definite  meaning,  that  something  may  be 
assigned.  If  it  cannot  be  assigned,  the  reader  may 
rest  assured  that  the  author,  whoever  he  be,  is  writing 
without  any  determinate  ideas." — TJie  Nature  of  Valne, 
pages  34  and  35. 

Professor  Jevons,  in  "  The  Theory  of  Political  Econ- 
omy," says,  "Value  implies,  in  fact,  a  relation;  but  if 
so,  it  cannot  possibly  be  some  other  tiling.  A  student 
of  economy  has  no  hope   of  ever  being   clear  and 


VALUE    OF   MONEY  21 

correct  in  his  ideas  of  the  science  if  he  thinks  of 
value  as  at  all  a  tJiiiig  or  object,  or  even  as  anything 
which  lies  in  a  thing  or  object. '' — The  Theory  of  Political 
Economy,  page  82. 

The  same  author,  in  his  well-known  work  on 
"  Money  and  the  Mechanism  of  Exchange,"  very 
tersely  remarks,  "  Value,  like  utility,  is  no  intrinsic 
quality  of  a  thing ;  it  is  an  extrinsic  accident  or 
relation." 

The  amount  of  labor  expended  in  producing  gold 
and  silver  bullion  does  not  determine  the  value  of 
money.  To  illustrate,  suppose  two  artists  each  de- 
vote a  month's  labor  in  producing  an  oil-painting. 
One  of  them  may  command  a  thousand  or  more 
dollars,  and  the  other  possibly  not  more  than  ten 
dollars,  though  each  might  have  spent  an  equal  num- 
ber of  hours'  labor  on  his  picture.  The  demand  for 
the  pictures  would  determine  their  value,  and  not  the 
amount  of  labor  expended  in  producing  them. 

The  supporters  of  the  gold  standard  persistently 
assert  that  the  true  test  of  money  is  "  fire ;"  that  if 
you  melt  down  a  gold  dollar  the  metal  will  be  worth 
as  much  as  the  dollar  before  it  was  melted  ;  but  if 
you  melt  down  a  silver  dollar,  the  value  of  the  metal 
will  be  less  than  one-half  the  value  of  the  silver 
dollar.      Such    nonsense   enters    into  the   arguments 


2  2  MONEY   AND   PROSPERITY 

addressed  to  those  who  do  but  Httle  thinking  for 
themselves.  Of  course,  if  you  melt  down  a  gold 
dollar  the  metal  will  be  worth  as  much  as  before  it 
was  melted,  because,  the  mints  being  opened  to  the 
free  and  unlimited  coinage  of  gold,  you  can  take  the 
metal  to  the  mints  and  have  it  coined  into  another 
gold  dollar;  but  since  1873,  when  our  mints  were 
closed  to  the  free  coinage  of  silver,  and  with  no  great 
civilized  nation  giving  free  and  unlimited  coinage  to 
the  metal,  it  is  absurd  to  expect  it  to  maintain  its  for- 
mer commercial  value ;  besides,  if  silver  were  equal 
in  value  to  gold,  at  the  ratio  of  sixteen  to  one,  and 
the  silver  dollar  should  be  melted  down,  the  mints 
would  refuse  to  recoin  it. 

The  beneficiaries  and  champions  of  the  gold  stand- 
ard are  constantly  speaking  of  intrinsic  value  in  the 
gold  dollar,  and  it  is  one  of  their  stock  arguments 
that  gold  is  preferable  to  silver,  inasmuch  as  the  so- 
called  intrinsic  value  in  the  gold  dollar  is  much 
greater  at  present  than  it  is  in  the  silver  dollar.  They 
contend  that  it  is  not  the  fiat  of  the  government  that 
gives  the  gold  and  the  silver  dollars  value,  but  that 
their  worth  is  owing  to  their  intrinsic  value, — that  the 
value  is  inherent.  Let  us  see  how  this  idea  will  bear 
analysis.  The  gold  dollar  contains  23.2  grains  of 
pure    gold;    the   silver   dollar   3/1/4^  grains  of  pure 


VALUE   OF   MONEY  23 

silver;  a  certain  amount  of  alloy  is  added  to  give  to 
each  the  requisite  hardness  and  durability.  It  is 
obvious  that  the  alloy  in  them  is  not  considered  in 
estimating  their  intrinsic  value.  If  these  dollars  pos- 
sess intrinsic  value,  and  as  the  metals  on  which  they 
are  based  are  not  of  different  degrees  of  purity,  but 
pure,  such  value  in  its  entirety  at  any  given  time 
would  be  100  per  cent.  When  silver  was  demone- 
tized in  1873,  the  intrinsic  value  of  gold  and  silver 
was  100  per  cent.;  they  are  now,  and  will  remain, 
100  per  cent.  The  value  of  gold  to-day,  as  measured 
in  silver,  is  more  than  twice  what  it  was  in  1873. 

The  fallacious  theory  of  intrinsic  value  in  money 
has  led  many  people  to  lose  sight  of  the  fact  that 
gold  and  silver  bullion  derive  their  principal  value 
from  the  use  of  the  metal  as  money.  Value  is  a 
mere  relation  of  a  thing  as  regards  other  things  and 
the  people  in  need  of  them.  There  are  two  factors 
which  constitute  value,  human  desire,  with  ability  to 
reduce  an  object  to  possession,  and  limitation  of  the 
number  of  objects  desired.  The  commercial  value  of 
gold,  like  other  commodities,  depends  upon  supply 
and  demand.  If  the  demand  is  continually  increas- 
ing, the  supply  must  be  increased,  or  the  value  will 
constantly  rise. 


CHAPTER    II 

THE  COST  OF  PRODUCTION  OF  THE  MATERIAL  FROM 
WHICH  MONEY  IS  MADE  DOES  NOT  DETERMINE  ITS 
VALUE 

Money,  properly  understood,  is  not  a  commodity. 
Gold  and  silver,  when  not  coined,  are  commodities. 
The  value  of  money  depends  principally  upon  supply 
and  demand,  and  not  upon  cost  of  production  of  the 
material  from  which  money  is  made. 

General  Walker,  who  is  opposed  to  paper  money, 
says,  "The  claim  that  greenbacks  are  not  money  in 
the  fullest  sense  of  that  term,  that  they  cannot  do  all 
in  the  way  of  measuring  values,  so  called,  which  gold 
or  silver  may  do,  is  untenable,  and  it  can  be  of  no 
advantage  to  any  really  sound  cause  to  seek  to  main- 
tain it." — Money  in  its  Relations  to  Trade  and  Industry, 

preface. 

Again,  he  says,  "  Money  is  to  be  known  by  its  doing 
a  certain  work.  Money  is  not  gold,  though  gold 
may  be  money ;  sometimes  gold  is  money  and  some- 
times it  is  not.  Money  is  no  one  thing,  no  group  of 
many  things  having  any  material  property  in  com- 
24 


THE   COST   OF   PRODUCTION,  ETC.  25 

mon.  On  the  contrary,  anything  may  be  money  ;  and 
anything,  in  a  given  time  and  place,  is  money  which 
then  and  there  performs  a  certain  function.  Always 
and  everywhere  that  which  docs  the  money  work  is 
the  money  thing." 

John  Stuart  Mill,  in  his  "  Political  Economy,"  says, 
"  From  their  durability,  the  total  quantity  in  existence 
is  at  all  times  so  great  in  proportion  to  the  annual 
supply  that  the  effect  on  value,  even  of  a  change  in 
the  cost  of  production,  is  not  sudden ;  a  very  long 
time  being  required  to  diminish  materially  the  quan- 
tity in  existence,  and  even  to  increase  it  very  greatly 
not  being  a  rapid  process." — Political  Ecojiomy,  Book 
III.,  chapter  vii. 

The  value  of  gold  and  silver  does  not,  for  many 
reasons,  depend  upon  the  cost  of  production  to  the 
extent  of  other  commodities.  The  cost  of  produc- 
tion has  not  been  a  factor  in  lowering  their  value. 
The  demand  for  money  has  always  been  greater  than 
the  supply,  and  it  is  not  conceivable  that  more  of  the 
metals  can  in  the  future  be  mined  than  will  be  needed 
for  use  as  money  and  in  the  arts. 

So-called  statisticians  and  advocates  of  the  gold 
standard  have  attempted  to  show  that  silver  can  be 
mined  for  fifty  cents  an  ounce.  No  note  is  taken  of 
the  millions  of  dollars  expended  in  unsuccessful  at- 


2  6  MONEY   AND    PROSPERITY 

tempts  to  locate  and  develop  mines.  Expert  miners 
claim  that  for  every  silver  or  gold  dollar  produced 
probably  two  have  been  expended.  In  mining  coal, 
iron,  or  other  metals,  mining  experts  can  form  reliable 
opinions  as  to  quantity  and  quality.  Machinery  and 
buildings  can  be  erected  and  a  safe  and  comparatively 
permanent  paying  business  established.  The  mining 
of  gold  and  silver,  however,  is  more  speculative. 

The  State  Geologist  of  Colorado,  Mr.  T.  A.  Rick- 
ard,  says,  "  Ore  deposits  are  not  inexhaustible.  The 
average  life  of  a  productive  mine  can  be  measured  on 
the  fingers  of  one  hand ;  and,  therefore,  any  region  to 
maintain  its  output  must  be  sustained  by  fresh  dis- 
coveries to  keep  pace  with  the  exhaustion  which 
creeps  upon  old  producers.  Such  is  no  longer  the 
case  in  silver-mining.  The  yield  of  Leadville  is 
maintained  because  some  of  its  ores  carry  a  heavy 
percentage  of  lead  as  a  by-product,  and  others  con- 
tain iron  in  such  proportion  as  to  render  the  out- 
put of  certain  mines  valuable  as  a  flux  in  the  smelt- 
ing of  silicious  gold  ores.  The  big  veins  of  Creede 
are  receiving  only  a  half-hearted  development.  The 
wonderful  bonanzas  of  Aspen  have  been  sadly  im- 
poverished, and  the  mines  of  Rico  are  crippled  by  an 
insufficiency  of  exploratory  work." — North  American 
Review  for  April,  1896. 


THE   COST   OF   PRODUCTION,  ETC.  27 

The  cost  of  gold-  and  silver-mining  cannot  be  de- 
termined from  the  output  of  one  or  two  mines.  An 
enormous  amount  of  money  is  spent  in  prospecting, 
tunnelling  mountains,  and  developing  mines  that  never 
yield  any  return.  Gold  and  silver  are  found  in  un- 
even veins  and  pockets.  One  blast  has  been  known 
to  blow  out  the  last  remnant  of  the  "  pay  streak"  in  a 
mine,  and  reduce  to  poverty  owners  who,  a  moment 
before,  thought  themselves  rich.  The  money  spent 
in  both  gold-  and  silver-mines  that  do  not  pay  is 
much  greater  than  that  spent  in  those  that  do  pay. 


CHAPTER   III 

IMPORTANCE   OF   STABILITY    OF   VALUE 

Money,  besides  being  a  medium  of  exchange  and 
a  measure  of  values,  is  a  standard  for  deferred  pay- 
ments ;  therefore,  to  be  ideal,  it  should  be  absolutely- 
invariable  in  character.  Gold  and  silver  are  produced 
in  limited  quantities,  and  it  is  obvious  that  if  we 
abandon  the  use  of  one  as  currency,  while  the  de- 
mand remains  the  same,  we  necessarily  double  the 
value  of  the  other.  It  is  impossible  to  have  a  money 
standard  absolutely  invariable  in  value  ;  but  variations 
of  a  few  cents  in  one  metal,  as  measured  by  the  other, 
are  infinitely  less  harmful  than  for  one  to  double  in 
value  and  then  continue  to  rise.  Constantly  increasing 
the  value  of  money  enormously  benefits  the  creditor 
class  at  the  expense  of  the  debtor,  who  has  to  give  up 
more  to  discharge  an  obligation. 

Let  us  suppose  that  a  man  borrows  five  thousand 
dollars  to-day,  agreeing  to  pay  it  back  at  the  expira- 
tion of  ten  years.  The  five  thousand  dollars  at  this 
time  will  buy  a  certain  amount  of  goods  and  property 
at  a  certain  price.     When  the  obligation  falls  due,  if 

prices  should  be  higher,  the  borrower  would  pay  back 
28 


IMPORTANCE   OF   STABILITY  OF  VALUE    29 

the  same  number  of  dollars  he  originally  received, 
but  they  would  have  less  purchasing  power,  and  the 
creditor  would  be  the  loser.  If  prices  should  be 
lower  their  purchasing  power  would  be  greater  and 
the  debtor  would  suffer. 

Gold  monometallists  say  they  prefer  the  gold  stand- 
ard because  it  insures  "  stable"  money.  The  gold  dollar 
having  doubled  in  value — that  is  to  say  ,  doubled  in 
purchasing  power — in  the  last  twenty-five  years  estab- 
lishes the  fact  that  it  is  not  a  stable  dollar.  Those 
who  possess  money,  or  securities  payable  in  money, 
know  that  when  prices  are  falling  they  can  obtain  an 
increasing  amount  of  the  products  of  labor  for  each 
dollar;  then,  in  the  opinion  of  the  creditor  class, 
money  is  "  stable,"  "  sound,"  and  "  honest." 

The  ratio  in  which  money  exchanges  for  other 
commodities  should  be  as  nearly  invariable  as  pos- 
sible. As  every  change  in  the  value  of  money  up- 
sets the  prices  of  all  kinds  of  property  and  causes 
more  or  less  damage,  according  to  the  extent  of  the 
change,  legislation  should  tend  towards  maintaining  a 
uniform  value  of  money. 

All  political  economists  and  authorities  on  the 
money  question  admit  the  quantitative  theory  of 
money.  Money  commands  all  human  needs.  These 
needs  are  constantly  increasing  with  increased  popu- 


30  MONEY  AND   PROSPERITY 

lation  and  production,  and  the  amount  of  money  in 
circulation  should  be  enlarged  to  meet  the  increased 
demands.  The  amount  of  money  in  circulation  meas- 
ures values ;  and  if  the  amount  is  large  the  total  value 
of  all  property,  as  expressed  in  dollars,  will  be  cor- 
respondingly large.  The  amount  of  money  in  circu- 
lation, other  things  remaining  the  same,  regulates  the 
value  of  each  dollar. 

Ex-Secretary  of  the  Treasury  Fairchild,  in  address- 
ing the  Monetary  Convention  at  Indianapolis,  January 
26,  1898,  said,  "A  fact  of  civilization  is,  that  men 
measure  value  by  gold,  and,  whatever  the  standard 
named  in  law,  men  will  continue  to  measure  value  by 
gold  while  the  present  civilized  order  endures." 

The  following  statement  of  the  Treasury  shows  the 
amount  of  money  which  the  present  Secretary  claims 
was  in  circulation  in  the  United  States  March  i,  1898  : 

Gold  coin $553,884,882 

Standard  silver  dollars 59,020,904 

Subsidiary  silver 64,270,811 

Gold  certificates 36,440,789 

Silver  certificates 380,287,427 

Treasury  notes,  Act  July  14,  1890     .    .    .  98,464,430 

United  States  notes      264,164,186 

Currency  certificates,  Act  June  8,  1872   .  48,430,000 

National  bank  notes 221,413,230 

Total $1,726,376,659 


IMPORTANCE   OF   STABILITY  OF  VALUE    31 

According-  to  Mr.  Fairchild's  claim,  the  value  of 
all  our  products  and  property  of  every  kind  must 
be  measured  by  ;S5 5 3,884,882  of  gold,  instead  of 
the  total  amount  of  all  kinds  of  money, — namely, 
;^  1, 726,376,659. 

When  we  reflect  that  nearly  all  the  gold  that  is  now 
being  mined  is  used  in  the  arts,  it  will  be  seen,  by 
continuing  to  measure  the  value  of  all  our  property 
and  commodities  by  the  gold  standard,  that  a  failure 
to  increase  the  supply  of  gold  must  result  in  a  con- 
tinued fall  of  prices. 

The  report  of  the  Secretary  of  the  Treasury  makes 
it  appear  that  the  per  capita  circulation  of  money  in 
the  United  States  March  i,  1898,  was  ;^23.42,  This  is 
manifestly  a  false  statement,  for  when  we  eliminate 
from  our  calculation  the  hoardings  of  banks  and  the 
amount  of  money  destroyed,  we  will  find  the  actual 
per  capita  to  be  less  than  ^10.  During  the  time  of 
our  Civil  War  the  per  capita  circulation  of  the  country 
amounted  to  about  ^65,  and  the  people  enjoyed  general 
prosperity. 


CHAPTER    IV 

■  THE    FUNCTIONS    OF    MONEY 

Money  remedies  the  inconveniences  of  barter,  and 
performs  two  distinct  functions,  acting  as  a  medium  of 
exchange  and  a  measure  of  values.  The  baker  having 
more  bread  than  he  needs  would  exchange  some  of  it 
for  meat ;  to  save  himself  the  trouble  of  hunting  up 
some  one  who  would  give  meat  for  bread,  he  ex- 
changes his  bread  for  money,  and  with  the  money 
buys  meat ;  thus  money  acts  as  a  medium  of  ex- 
change and  a  common  measure  of  value.  When 
people  began  to  borrow  and  lend,  a  third  function  of 
money  developed, — a  standard  of  value.  Since  all  con- 
tracts and  debts  are  based  on  the  standard  of  value 
existing  at  the  time,  it  is  obvious  that  the  standard 
should  be  as  nearly  invariable  as  possible.  If  it  re- 
quires more  of  the  products  of  labor  to  obtain  the 
money  necessary  to  discharge  a  debt,  other  condi- 
tions remaining  the  same,  than  it  did  when  the  debt 
was  contracted,  the  debtor  is  the  sufferer.  If  it  re- 
quires less  labor,  the  creditor  is  the  loser. 

Even  in  the  time  of  Aristotle  the  function  of  money 
32 


THE   FUNCTIONS   OF   MONEY  33 

was  well  understood.  He  says,  "  Intercourse  takes 
place  between  people  having  different  objects  of  de- 
sire. In  order  that  they  may  be  exchanged  with  each 
other  it  is  necessary  that  they  should  be  compared  ; 
for  which  purpose  money  came  forward,  and  is,  as  it 
were,  a  medium,  for  it  measures  everything,  both  the 
excess  and  the  defect ;  as,  for  instance,  how  many 
pairs  of  shoes  will  be  equal  to  a  house  or  to  food;  for 
if  this  is  not  done  there  will  be  no  exchange  or  inter- 
course. All  things,  therefore,  must  be  measured ;  but 
it  is,  in  truth,  want ' — or  demand — "which  holds  all 
things  together,  for  if  persons  wanted  nothing  from 
each  other,  or  not  equally,  there  would  be  no  ex- 
change. Money,  then,  has  been  made,  by  agreement 
as  it  were,  a  substitute  for  demand,  and  is  so  called 
because  it  exists  not  by  nature  but  by  lazv,  and  it  is  in 
07ir  power  to  change  it  and  make  it  useless  for  tJie  pur- 
pose. If  it  were  not  possible  to  exchange,  there  would 
be  no  commerce.  If  a  man  requires  nothing  at  the 
present  time,  money  is,  as  it  were,  a  surety  to  him 
for  a  future  exchange  that  it  shall  be  made  when 
he  wants  it.  But  money  itself  is  not  always  of  the 
same  value,  yet  it  has  more  tendency  to  remain  fixed, 
wherefore  everything  ought  to  be  appraised,  for  so 
there  will  be  exchange.  Money,  like  a  measure, 
makes  things  equal ;  for  if  there  were  no  exchange 


34  MONEY   AND   PROSPERITY 

there  would  be  no  intercourse,  nor  any  exchange  if 
there  were  no  equality,  nor  any  equality  if  there  were 
no  common  measure.  In  truth,  it  is  impossible  that 
things  differing  so  much  should  be  commensurate, 
but  for  practical  use  it  is  sufficiently  possible.  Money 
makes  all  things  commensurable,  fo7'  all  things  are 
measured  by  money T 

It  is  the  function  that  gives  most  of  the  value  to 
the  material  from  which  money  is  made,  and  not  the 
material  that  gives  value  to  the  function.  If  every 
nation  in  the  world  should  demonetize  gold  and  silver, 
the  metals  would  lose  almost  their  entire  value,  and 
it  is,  therefore,  absurd  to  claim  that  it  is  the  material 
that  gives  them  their  value  when  used  as  money. 

Money  is  a  function  rather  than  a  material, — a  crea- 
tion of  society,  and  without  it  society  could  not  exist ; 
it  renders  the  exchange  of  each  fractional  part  of  an 
article  as  easy  as  the  exchange  of  the  whole.  What 
blood  is  to  the  human  body  money  is  to  the  industrial 
body. 


CHAPTER    V 

DEMONETIZATION    OF   SILVER 

Bimetallism  may  be  defined  to  be  the  free  and 
unlimited  coinage  of  both  gold  and  silver  into  coins 
of  full  legal  tender  money  of  final  payment  and  re- 
demption, at  a  fixed  ratio  prescribed  by  Congress, 
with  the  value  of  each  coin  stamped  thereon. 

In  the  days  of  Washington  and  Jefferson,  in  1792, 
Congress  passed  the  first  coinage  law.  The  dollar  was 
made  the  unit  of  value  and  the  money  of  account. 
The  silver  dollar  was  to  consist  of  three  hundred  and 
seventy-one  and  a  quarter  grains  of  pure  silver,  or 
four  hundred  and  sixteen  grains  of  standard  silver. 
The  gold  dollar  contained  24.75  grains  of  pure  gold, 
or  27  grains  of  standard  gold.  A  ratio  was  fi.xed 
between  silver  and  gold  at  fifteen  to  one. 

In  1834  the  amount  of  gold  in  the  gold  dollar  was 
decreased  from  24.75  grains  to  23.20  grains  of  pure 
gold,  or  25.8  grains  of  standard  gold,  the  ratio  be- 
tween gold  and  silver  being  changed  from  fifteen  to 
one  to  15.988,  or  sixteen,  to  one.  In  1837  the  gold  in 
the    gold   dollar  was   changed    from    23.20  to   23.22 

35 


36  MONEY   AND   PROSPERITY 

grains.  The  standard  weight  of  the  gold  dollar  was 
left  unchanged  at  25.8.  The  same  year,  1837,  the 
standard  weight  of  the  silver  dollar  was  reduced  from 
four  hundred  and  sixteen  to  four  hundred  and  twelve 
and  a  half  grains ;  but  the  amount  of  pure  silver  in 
the  silver  dollar  was  never  changed  from  three  hun- 
dred and  seventy-one  and  a  quarter  grains  of  pure 
silver.  In  view  of  the  fact  that  there  appears  to  exist 
on  the  part  of  a  few  people  a  misapprehension  of  the 
term  sixteen  to  one,  it  may  be  well  to  say  that  by 
it  we  are  to  understand  that  the  silver  in  the  silver 
dollar  is  sixteen  times  as  heavy  as  the  gold  in  the 
gold  dollar. 

The  mints  were  open  to  the  free  coinage  of  both 
gold  and  silver  until  1873,  and  both  were  full  legal 
tender  for  all  debts,  both  public  and  private.  In  1873 
silver  was  demonetized,  and  the  following  table,  giving 
the  ratio  of  silver  to  gold  from  1792  to  1896,  will 
show  that  there  was  in  1873  no  fear  of  cheap  silver 
dollars  or  of  over-production  of  the  metal. 


DEMONETIZATION   OF   SILVER 


37 


Commercial  Ratio  of  Silver  to  Gold  from  1792  to  1896  Inclusive. 

(From  the  United  States  Statistical  Abstract,  1896.) 


Year. 

Ratio. 

Year. 

Ratio. 

Year. 

Ratio. 

Year. 

Ratio. 

1792 

1517 

1819 

15-33 

1846 

15.90 

1873 

15-92 

1793 

15.00 

1820 

15.62 

1847 

15.80 

1874 

16.17 

1794 

15-37 

182I 

15-95 

1848 

15-85 

1875 

16.59 

1795 

15-55 

1822 

15.80 

1849 

15-78 

1876 

17.88 

1796 

15-65 

1823 

15.84 

1850 

15-70 

1877 

17.22 

1797 

15-41 

1824 

15.82 

1851 

15.46 

1878 

17.94 

1798 

15-59 

1825 

15-70 

1852 

15-59 

1879 

18.40 

1799 

15-74 

1826 

15.76 

1853 

1533 

1880 

18.05 

1800 

15.68 

1827 

15-74 

1854 

15-33 

1881 

18.16 

i8oi 

15.46 

1828 

15-78 

1855 

15-38 

1882 

18.19 

1802 

15.26 

1829 

15-78 

1856 

15-38 

1883 

18.64 

1803 

15.41 

1830 

15.82 

1857 

15-27 

1884 

18.57 

1804 

15-41 

183I 

15-72 

1858 

15-38 

1885 

19.41 

1805 

15-79 

1832 

15-73 

1859 

15.19 

1886 

20.78 

1806 

15-52 

1833 

15-93 

i860 

15.29 

1887 

21.13 

1807 

15-43 

1834 

15-73 

I  1861 

15-50 

1888 

21.99 

1808 

16.08 

1835 

15.80 

1862 

15-35 

1889 

22.10 

1809 

15.96 

1836 

15.72 

1863 

15-37 

1890 

19.76 

1810 

15-77 

1837 

15-83 

1864 

15-37 

189I 

20.92 

1811 

15-53 

1838 

15-85 

1865 

15-44 

1892 

23.72 

1812 

16.11 

1839 

15.62 

1  1866 

15-43 

1893 

26.49 

1813 

16.25 

1840 

15.62 

1867 

15-57 

1894 

32-56 

1814 

15.04 

184I 

15-70 

1868 

15-59 

1895 

31.60 

1815 

15.26 

1842 

15-87 

1S69 

15.60 

1S96 

30.32 

1816 

15.28 

1843 

1593 

1870 

15-57 

1817 

15.11 

1844 

15-85 

187I 

15-57 

1818 

15-35 

1845 

15-92 

1872 

15-63 

38  MONEY   AND    PROSPERITY 

When  considering  the  money  question,  one  should 
adhere  to  sah'ent  and  decisive  facts.  The  creditor 
class,  and  the  gold  standard  press  in  particular,  sel- 
dom refer  to  the  past  history  of  money  and  monetary 
laws,  except  either  by  generalities  or  misrepresenta- 
tions. They  have  so  often  declared  that  there  is  a 
great  over-production  of  silver  that  many  quite  honest 
and  unsuspecting  people  actually  believe  it. 

The  following  table  from  the  Statistical  Abstract  of 
the  United  States,  1896,  shows  the  amount  of  gold 
and  silver  produced  in  the  world  from  185 1  to  1896 
inclusive.  By  this  it  will  be  seen  that  during  that 
time  the  production  of  gold  exceeded  that  of  silver 
by  ^1,484,872,600. 


DEMONETIZATION   OK   SILVER 


39 


Productiou  of  Gold  and  Silver  in  the  World  from  1851  to  1896 

Inclusive. 

Calendar  Years.  Gold.  Silver. 

185I-1855 $662,566,000  $184,169,000 

1856-I860 670,415,000  188,092,000 

1861-1865 614,944,000  228,861,000 

1866-1870 648,071,000  278,313,000 

187I-1S75 577,883,000  ^      409,322,000 

1876-18S0 572,931,000  509,256,000 

188I-1S85 495,582,000  594-773.000 

1886 106,163,900  120,626,800 

1887 105.774,900  124,281,000 

1888 110,196,900  140,706,400 

1889 123,489,200  155,427,700 

1890 118,848,700  163,032,000 

189I 130,650,000  177,352,300 

1892 146,815,100  198,014,400 

1893 157,287,600  214,745,300 

1894 180,626,100  216,892,200 

1895 203,000,000  226,000,000 

1896* 202,956,000  213,463,700 

Total $5,828,200,400  $4,343,327,800 

*  From  the  United  States  Mint  Report  for  1S97. 


40  MONEY   AND    PROSPERITY 

When,  in  1873,  the  United  States  closed  the  mints 
to  the  free  and  unlimited  coinage  of  silver,  the  value 
of  gold  and  silver  had,  for  more  than  one  hundred 
years,  never  varied  more  than  three  cents.  At  the 
time  of  this  demonetization  the  value  of  silver  bullion, 
as  measured  in  gold  at  the  ratio  of  sixteen  to  one,  was 
actually  about  three  per  cent,  higher  than  gold.  The 
demonetization  act  was  engineered  slyly  through  Con- 
gress under  the  title,  "  An  Act  revising  and  amending 
the  Laws  Relative  to  Mints,  Assay  Offices,  and  Coinage 
of  the  United  States."  As  neither  gold  nor  silver  was 
in  circulation  as  currency  at  that  time,  it  was  compara- 
tively easy  for  a  few  representatives  of  the  money- 
changers to  adroitly  incorporate  in  the  act  a  clause 
which  cut  off  one-half  of  our  money  supply.  This 
reads  as  follows  :  "  The  gold  coins  of  the  United  States 
shall  be  a  o)ic  dollar  piece,  which,  at  the  standard 
weight  of  twenty-five  and  eight-tenths  grains,  shall  be 
the  unit  of  value."  This  is  the  act  that  demonetized 
silver. 

Prior  to  this  demonetization  act,  silver  was  ad- 
mitted to  the  mints  as  freely  as  gold ;  but  since  gold 
became  the  itnit  of  value,  silver  has  been  denied  free 
coinage. 

When  the  people  learned  that  silver  had  been  de- 
monetized, and  that  when  specie  payments  should  be 


DEMONETIZATION   OF   SILVER  41 

resumed  they  would  be  practically  on  the  single  gold 
standard  basis,  they  perceived  that  by  unfair  means 
they  had  been  victimized  by  the  creditor  class,  and 
resolved  that  silver  should  and  must  be  restored  to  its 
proper  place  as  currency.  For  twenty  years  bimetal- 
lists  have  shown  how  the  producing  and  business 
classes  have  suffered  and  been  defrauded  by  the 
demonetization  of  silver. 

Mr.  John  G.  Carlisle,  of  Kentucky,  though  now  a 
gold  standard  advocate,  in  speaking  of  what  is  called 
"The  crime  of  1873,"  said,  "  According  to  my  view  of 
the  subject,  the  conspiracy  which  seems  to  have  been 
formed  here  and  in  Europe  to  destroy,  by  legislation 
and  otherwise,  from  three-sevenths  to  one-half  the 
metallic  money  in  the  world,  is  the  most  gigantic 
crime  of  this  or  any  other  age." 

There  is  no  doubt  but  that  silver  was  surreptitiously 
demonetized  by  a  few  wily  politicians  who  successfully 
deceived  their  colleagues  in  Congress,  for  most  of  the 
leading  men  in  both  the  Senate  and  the  House  did  not 
know  that  the  bill  would  stop  the  free  and  unlimited 
coinage  of  the  metal. 

In  January,  1868,  Senator  John  Sherman,  of  Ohio, 
introduced  in  the  Senate  of  the  United  States  a  bill 
which  had  for  its  object  the  demonetization  of  silver. 
This  bill  was  never  called  up  for  action.     Again,  in 


42  MONEY   AND   PROSPERITY 

April,  1870,  Senator  Sherman  introduced  another  bill 
which  provided  for  the  demonetization  of  silver.  This 
passed  the  Senate,  but  when  it  reached  the  lower  house 
it  was  killed  by  an  amendment  in  the  nature  of  a  sub- 
stitute. 

Mr.  Sherman,  and  a  few  others,  undoubtedly  knew 
the  nature  of  the  bill  which  demonetized  silver  in  1873. 
They  engineered  it  so  skilfully  through  Congress, 
however,  that  General  Grant,  who  was  then  President, 
said  afterwards  that  he  did  not  realize  until  it  was  too 
late  that  silver  was  being  demonetized  by  the  act,  and 
that  if  he  had,  he  would  not  have  signed  the  bill. 

In  a  speech  delivered  in  the  Senate,  January  10, 
1878,  Senator  Beck  said,  "It — the  bill  demonetizing 
silver — never  was  understood  by  either  House  of  Con- 
gress. I  say  that  with  full  knowledge  of  the  facts. 
No  newspaper  reporter — and  they  are  the  most  vigi- 
lant men  I  ever  saw  in  obtaining  information — dis- 
covered that  it  had  been  done." 

Senator  Thurman,  referring  to  the  passage  of  this 
bill,  said, "  I  cannot  say  what  took  place  in  the  House, 
but  know  when  the  bill  was  pending  in  the  Senate  we 
thought  it  was  simply  a  bill  to  reform  the  mint, 
regulate  coinage,  and  fix  up  one  thing  and  another, 
and  there  is  not  a  single  man  in  the  Senate,  I  think, 
unless  a  member  of  the  committee  from  which  the 


DEMONETIZATION   OF   SILVER  43 

bill  came,  who  had  the  slightest  idea  that  it  was 
even  a  squint  towards  demonetization." — Congressional 
Record,  February  15,  1878. 

The  same  day,  February  15,  1S78,  the  following 
discussion  took  place  between  Senators  Voorhees  and 
Blaine : 

Mr.  Voorhees :  "  I  want  to  ask  my  friend  from 
Maine,  whom  I  am  glad  to  designate  in  that  way, 
whether  I  may  call  him  as  one  more  witness  to  the 
fact  that  it  was  not  generally  known  whether  silver 
was  demonetized  ?  Did  he  know,  as  Speaker  of  the 
House  presiding  at  that  time,  that  the  silver  dollar 
was  demonetized  in  the  bill  to  which  he  alludes  ?" 

Mr.  Blaine :  "  I  did  not  know  anything  that  was  in 
the  bill  at  all.  As  I  have  before  said,  little  was  known 
or  cared  on  the  subject.  And  now  I  should  like  to  ex- 
change questions  with  the  Senator  from  Indiana,  who 
was  then  on  the  floor,  and  whose  business  it  was,  far 
more  than  mine,  to  know,  because  by  the  designation 
of  the  House  I  was  to  put  questions ;  the  Senator 
from  Indiana,  then  on  the  floor  of  the  House,  with  his 
power  as  a  debater,  was  to  unfold  them  to  the  House. 
Did  he  know  ?" 

Mr.  Voorhees :  "  I  very  frankly  say  that  I  did  not." 

Mr.  W.  D.  Kelley,  of  Pennsylvania,  on  March  9, 
1878,  in  a  speech  made  in  the  House  of  Representa- 


44  MONEY   AND    PROSPERITY 

tives,  said,  "  In  connection  with  the  charge  that  I 
advocated  the  bill  which  demonetized  the  standard 
silver  dollar,  I  say  that,  though  the  chairman  of  the 
Committee  on  Coinage,  I  was  ignorant  of  the  fact  that 
it  would  demonetize  the  silver  dollar  or  of  its  dropping 
the  silver  dollar  from  our  system  of  coins,  as  were 
those  distinguished  Senators,  Messrs.  Blaine  and 
Voorhees,  who  were  then  members  of  the  House,  and 
each  of  whom  a  few  days  since  interrogated  the  other, 
'  Did  you  know  it  was  dropped  when  the  bill  passed  ?' 
'  No,'  said  Mr.  Blaine ;  '  did  you  ?'  '  No,'  said  Mr. 
Voorhees.  *  I  do  not  think  that  there  were  three 
members  in  the  House  that  knew  it.  I  doubt  whether 
Mr.  Hooper,  who  in  my  absence  from  the  Committee 
on  Coinage  and  attendance  on  the  Committee  on  Ways 
and  Means  managed  the  bill,  knew  it.  I  say  this  in 
justice  to  him.'  " — Congressional  Record,  Forty-fifth 
Congress,  second  session,  page  1605. 

Again,  on  May  10,  1879,  Mr.  Kelley  said,  "All 
I  can  say  is  that  the  Committee  on  Coinage,  Weights, 
and  Measures,  who  reported  the  original  bill,  were 
faithful  and  able  and  scanned  its  provisions  closely ; 
that  as  their  organ  I  reported  it ;  that  it  contained 
provision  for  both  the  standard  silver  dollar  and  the 
trade  dollar.  Never  having  heard  until  a  long  time 
after  its  enactment  into  law  of  the  substitution  in  the 


DEMONETIZATION  OF  SILVER  45 

Senate  of  the  section  which  ch-opped  the  standard 
dollar,  I  profess  to  know  nothing  of  its  history  ;  but  I 
am  prepared  to  say  that  /;/  all  tJic  legislation  of  this 
country  there  is  no  mystery  equal  to  the  demonetization 
of  the  standard  silver  dollar  of  the  United  States.  I 
have  never  found  a  man  who  could  tell  just  how  it 
came  about  or  why." — Cojigressional  Record,  Forty- 
sixth  Congress,  first  session,  page  1231, 

In  a  speech  made  at  Springfield,  Ohio,  in  the  autumn 
of  1877,  General  Garfield  said,  "Perhaps  I  ought  to 
be  ashamed  to  say  so,  but  it  is  the  truth  to  say  that, 
at  that  time  being  chairman  of  the  Committee  on  Ap- 
propriations and  having  my  hands  overfull  during  all 
that  time  with  work,  I  never  read  the  bill.  I  took  it 
upon  the  faith  of  a  prominent  Democrat  and  a  promi- 
nent Republican,  and  I  do  not  know  that  I  voted  at  all. 
There  was  no  call  of  the  yeas  and  nays,  and  nobody 
opposed  that  bill  that  I  know  of  It  was  put  through, 
as  dozens  of  bills  are,  as  my  friend  and  I  know,  in 
Congress,  on  the  faith  of  the  report  of  the  chairman 
of  the  committee ;  therefore,  I  tell  you,  because  it  is 
the  truth,  that  I  have  no  knowledge  about  it." 

The  cutting  off  by  illegal  legislation  of  practically 
one-half  the  money  supply  has  caused  more  idleness, 
more  suffering,  more  almshouses,  and  greater  loss  to 
the  people  of  this  nation  than  our  Civil  War. 


46  MONEY   AND   PROSPERITY 

The  student  of  political  economy  has  only  to  turn 
back  the  pages  of  history  to  the  decadence  of  the 
Roman  empire  in  order  to  find  that  one  of  the  pri- 
mary causes  of  the  fall  of  Rome,  and  the  subsequent 
waning  of  civilization  during  the  Dark  Ages,  was  a 
shrinkage  in  the  volume  of  money.  During  the  early 
years  of  the  Christian  era  the  metallic  money  of  the 
Roman  empire  amounted  to  no  less  than  one  billion 
eight  hundred  million  dollars ;  but  by  the  end  of  the 
fifteenth  century  there  was  only  a  comparatively  small 
amount  of  metaUic  money  in  Europe,  and  most  of  this 
was  hoarded  in  the  caskets  of  princes  and  bankers,  there 
being  but  little  actual  money  in  circulation.  In  view 
of  this  fact,  the  contention  of  some  historians  that  the 
fall  of  the  Roman  empire  was  due  to  moral  depravity 
and  slavery  appears  to  be  not  entirely  correct.  It 
cannot  be  maintained  that  the  rapid  disappearance  of 
the  money  supply  was  not  without  a  serious  effect 
upon  the  civil  and  military  resources  of  the  empire. 

Creditors,  money-owners,  and  holders  of  fixed  in- 
vestments are,  for  a  time,  immensely  benefited  by  the 
gold  standard,  which  increases  the  purchasing  power 
of  a  dollar,  while  the  debtors  and  wealth-producing 
classes  are  injured.  If  the  gold  standard  is  main- 
tained, there  will  come  a  time,  however,  when  the 
creditor  class  must  suffer,  as  a  final  effect  of  falling 


DEMONETIZATION   OF   SILVER  47 

prices.  When  business  depression  is  carried  beyond 
a  certain  point  general  dissolution  sets  in,  as  it  did 
during  the  Dark  Ages. 

In  a  speech  delivered  in  1839,  Abraham  Lincoln 
said,  "When  one  hundred  millions,  or  more,  of  the 
circulation  we  now  have  shall  be  withdrawn,  who  can 
contemplate  without  terror  the  distress,  ruin,  bank- 
ruptcy, and  beggary  that  must  follow.  The  man  who 
has  purchased  an  article — say  a  horse — on  credit,  at 
one  hundred  dollars,  when  there  are  two  hundred 
millions  circulating  in  the  country,  if  the  quantity  be 
reduced  to  one  hundred  millions  by  the  arrival  of  pay 
day,  will,  other  conditions  remaining  the  same,  find 
the  horse  but  sufficient  to  pay  half  the  debt ;  and  the 
other  half  must  either  be  paid  out  of  his  other  means, 
and  thereby  become  a  clear  loss  to  him,  or  go  un- 
paid, and  thereby  become  a  clear  loss  to  his  creditor. 
What  I  have  here  said  of  a  single  case  of  the  purchase 
of  a  horse  will  hold  good  in  every  case  of  debt  existing 
at  the  time  a  reduction  in  the  quantity  of  money  occurs, 
by  whomsoever  and  for  whatsoever  it  may  have  been 
contracted.  It  may  be  said  that  what  the  debtor  loses 
the  creditor  gains  by  this  operation ;  but  on  exami- 
nation this  will  be  found  true  only  to  a  very  limited 
extent.  It  is  more  generally  true  that  all  lose  by  it, — 
the  creditor  by  losing  more  of  his  debts  than  he  gains 


48  MONEY   AND   PROSPERITY 

by  the  increased  value  of  those  he  collects;  the  debtor 
by  either  parting  with  more  of  his  property  to  pay  his 
debts  than  he  received  in  contracting  them,  or  by 
entirely  breaking  up  his  business,  and  thereby  being 
thrown  upon  the  world  in  idleness." 

It  is  not  to  be  denied  that  since  the  demonetization 
of  silver  the  American  people  have  enjoyed  at  inter- 
vals a  certain  amount  of  prosperity.  This  fact,  how- 
ever, cannot  be  said  to  constitute  a  sound  argument 
in  favor  of  the  single  gold  standard,  for  the  reason 
that  we  find  in  the  history  of  almost  every  monetary 
system  which  has  been  tested  in  modern  times  that 
short-lived  periods  of  apparent  prosperity  oftentimes 
succeed  corresponding  periods  of  depression.  At  no 
time  do  we  find  in  the  history  of  the  United  States 
a  period  of  prosperity  so  long  and  so  unmistakable  as 
that  which  extended  from  1850  to  the  demonetization 
of  silver  in  1873.  Since  this  demonetization  many 
men  have  become  millionaires,  and  a  few  have  ac- 
quired considerable  wealth  in  the  ordinary  industries 
of  trade ;  but  we  cannot  be  considered  wealthy  as 
a  nation  when  nearly  all  the  wealth  is  concentrated  in 
the  hands  of  a  few.  More  than  half  the  wealth  of  the 
United  States  is  owned  by  fewer  than  three  per  cent, 
of  the  people  of  this  country.  This  centralization  of 
enormous  amounts  of  wealth  under  the  control  of  the 


DEMONETIZATION   OF   SILVER  49 

few  has  been  made  possible  largely  by  the  demonetiza- 
tion of  silver,  which  has  enabled  the  creditor  class  to 
legally  confiscate  the  property  of  the  debtor. 

If  this  country  had  enjoyed  the  free  coinage  of 
both  gold  and  silver,  we  would  not  have  had  the 
panics  of  1884  and  1893,  and  all  our  people  would 
have  been  constantly  employed  in  the  production  of 
wealth.  We  would  probably  have  been  almost,  if  not 
quite,  twice  as  wealthy  as  a  nation,  and  all  our  private 
holdings  would  have  been  immensely  increased.  Our 
public  debt,  too,  might  have  been  entirely  wiped  out, 
much  to  the  chagrin  of  the  money-lending  class. 

It  is  repeatedly  said  that  the  large  amount  of  money 
lying  idle  in  banking  institutions,  together  with  the 
low  rate  of  interest,  are  evidences  that  our  country's 
long  lost  prosperity  is  being  restored.  Many  honest- 
meaning  people  accept  these  statements  as  tending  to 
show  that  labor  is  again  fully  employed,  and  that 
industries  in  general  are  in  full  working  order;  but 
these  fallacious  arguments  are  disproved  by  the  fact 
that  millions  of  men  are  out  of  employment  to-day. 
These  idle  men,  if  employed,  would  engage  all  the 
surplus  money  and  many  hundred  millions  more  at 
a  higher  rate  of  interest  than  money  now  com- 
mands. 

When  prices  are  falling,  manufacturers  cannot  bor- 

4 


50  MONEY   AND   PROSPERITY 

row  money  at  any  rate  of  interest  and  make  it  profit- 
able ;  neither  can  the  holder  of  the  idle  capital  afford 
to  lend  it  at  such  times,  for  he  fears  the  inability  of 
the  borrower  to  pay  back  even  the  principal,  to  say 
nothing  of  interest  at  any  rate.  But  these  "  idle 
holders  of  idle  capital"  will  not  suffer  so  long  as 
prices  continue  falling,  for  their  money  will  com- 
mand more  each  year. 

General  prices  have  fallen  in  the  last  five  years 
twenty  per  cent. ;  this  means  an  unearned  increment 
of  money  at  the  rate  of  five  per  cent,  per  annum,  and 
all  holders  of  money  or  securities  payable  in  money 
are  benefited  to  this  extent  at  the  expense  of  the 
producing  and  industrial  classes.  So  long  as  labor 
in  many  branches  of  trade  remains  employed  on  half 
time  at  cut-rate  wages,  and  so  long  as  the  unemployed 
can  be  counted  by  the  millions,  business  will  remain 
stagnant. 

By  the  demonetization  act  one-half  of  the  full  legal 
tender  money  supply  of  the  country  was  stopped. 
The  result  has  been  financial  disaster  to  our  people, 
Remonetize  silver  and  new  life-blood  will  be  infused 
into  every  form  of  human  industry.  This  country  is 
capable  of  supporting  many  hundred  times  its  present 
population,  and,  if  given  a  fair  opportunity,  it  is  and 
will  continue  to  be  the  greatest  nation  on  earth.     An 


DEMONETIZATION   OF   SILVER  51 

insufficient  amount  of  money  retards  progress,  while 
a  more  adequate  supply  pushes  it  forward  by  leaps 
and  bounds.  We  have  had  almost  continuous  falling 
prices  since  silver  was  demonetized.  Rising  or  stable 
prices  zvilL  not  be  restored  until  more  fnll  legal  tender 
money  is  pjit  into  circidation. 

The  breach  between  gold  and  silver  was  not  the 
result  of  a  change  in  the  cost  of  production  or  the 
over-supply  of  either  metal,  and,  as  there  is  not  nearly 
enough  gold  mined  to  meet  the  demand  for  metallic 
money,  both  gold  and  silver,  at  a  fixed  ratio,  should 
be  received  at  our  mints,  without  discrimination  as  to 
either  metal,  and  coined  into  money. 

Those  who  oppose  the  remonetization  of  silver 
must  be  content  with  the  gold  range  of  prices.  If 
the  producing  and  business  classes  are  reduced  to 
the  condition  of  tlie  people  during  the  Dark  Ages, 
or  even  to  the  level  of  the  working-classes  of  Great 
Britain  of  to-day,  the  gold  standard  will  most  likely 
be  the  cause. 

Silver  was  denied  free  and  unlimited  coinage  because 
the  bondholders,  owners  of  money,  and  others  with 
fixed  incomes  wanted  to  increase  the  value  of  money 
by  driving  down  the  prices  of  all  kinds  of  property 
and  goods.  They  knew  that  by  cutting  off  the  annual 
money  supply  all  their  holdings  of  money  and  money 


52  MONEY   AND   PROSPERITY 

securities  would  each  year  command  more  of  the 
products  of  labor. 

Prices  have  been  unjustly  forced  down  fifty  per  cent., 
which  means  an  increase  of  fifty  per  cent,  in  the  value 
of  money,  and  when  the  people  demand  simply  that 
which  was  given  to  them  by  our  Constitution, — viz., 
the  right  to  keep  our  mints  open  to  the  free  and 
unlimited  coinage  of  silver,  as  well  as  of  gold,  at  the 
legal  ratio  of  sixteen  to  one,  without  asking  per- 
mission of  European  countries, — these  money  manip- 
ulators cry  fraud  and  repudiation. 

The  total  debts  of  the  world,  both  public  and  pri- 
vate, are  estimated  to  be  about  one  hundred  and  fifty 
billion  dollars.  Think  of  the  tremendous  loss  to  the 
debtor  and  gain  to  the  creditor  when  several  of  the 
leading  nations,  in  1873-74,  cut  off  the  annual  money 
supply  of  their  people  by  the  demonetization  of  silver ! 
It  is  said  that  many  of  the  debts  owing  at  that  time 
have  been  paid  off,  and  that  the  creditor  of  to-day 
should  not  be  obliged  to  suffer  loss  by  materially 
increasing  the  annual  supply  of  money.  It  is  true 
that  some  of  the  debts  have  been  paid  since  silver  was 
demonetized,  but  others  have  been  increased  and  new 
ones  made  in  order  to  retain  possession  of  goods  and 
property  which  are  constantly  falling  in  price.  If  the 
people  had  any  assurance  that  prices  would  remain 


DEMONETIZATION   OF   SILVER  53 

stable,  even  at  the  present  low  level,  their  ardent  de- 
sire for  the  remonetization  of  silver  might,  to  some 
extent,  be  checked. 

Owing  to  the  scarcity  of  gold  and  the  impossibility 
of  producing  it  in  sufficient  quantities  to  meet  the 
increasing  demand  for  full  redemption  money,  bi- 
metallists  know  that  still  further  falls  of  prices  in  the 
future  are  inevitable  if  our  present  monetary  system 
is  maintained.  Have  all  the  capitalists  suddenly 
ceased  to  grasp  for  money,  or  to  plan  to  increase  their 
own  fortunes  ?  Have  all  the  bankers  and  creditors  of 
the  country  concluded  to  devote  their  spare  time  to 
the  perfection  of  a  monetary  system  wholly  in  the 
interest  of  the  producing  and  business  classes  ?  If 
we  are  to  believe  their  statements,  they  object  to  the 
remonetization  of  silver,  not  for  the  reason  that  it 
would  injure  them,  but  because  it  would  be  injurious 
to  the  working  and  business  classes.  Those  who 
favor  the  double  standard  say  they  want  the  free  and 
unlimited  coinage  of  silver  because  it  will  not  only 
benefit  them,  but  others  as  well. 

The    motive    of  those    who    were    instrumental    in 
demonetizing  silver,  and  of  those  who  now  so  stren- 
uously object  to  the  United  States  government  re- 
opening the  mints  to  the  free  coinage  of  the  metal 
was,  and  is,  a  selfish  one. 


CHAPTER    VI 

THE    GOLD   STANDARD 

The  issue  between  those  who  favor  bimetallism  and 
the  advocates  of  the  gold  standard  is,  that  since  the 
demonetization  of  silver  in  1873  the  annual  supply  of 
gold,  including  the  standard  silver  dollars  coined  since 
that  time,  has  not  been  sufficient  to  prevent  general 
prices  from  falling,  and  that  there  is  not  now  enough 
gold  mined,  or  will  be  in  the  future,  to  prevent  a  still 
further  fall  of  prices. 

The  total  value  of  all  the  property  in  the  world  is 
estimated  to  be  about  three  hundred  and  fifty  billion 
dollars.  The  total  debts  of  the  world,  both  public  and 
private,  are  estimated  to  be  about  one  hundred  and 
fifty  billion  dollars.  This  estimate  does  not  include 
the  enormous  indebtedness  arising  from  modern  com- 
mercial transactions.  Seventy-five  per  cent,  of  the 
world's  business  is  based  on  some  sort  of  credit  or 
deferred  payment.  The  value  of  all  property,  as 
measured  in  money,  has  been  shrinking,  while  the 
debts  have  been  increasing.  According  to  the  report 
of  the  United  States  Mint,  the  amount  of  gold  coin  in 
54 


THE   GOLD   STANDARD  55 

the  world  is  about  four  billion  dollars ;  and  there  is 
about  the  same  amount  of  silver  coin.  Estimates  have 
been  made  by  Mr.  W.  H.  Harvey,  showing  that  all 
the  gold  in  the  world  could  be  put  into  a  space  equal 
to  a  cube  of  twenty-two  feet. 

The  population  of  the  world  in  1890  was  estimated 
to  be  about  one  billion  four  hundred  million.  This 
estimate  shows  a  per  capita  of  less  than  three  dollars 
in  gold.  Nearly  all  the  gold  coin  in  the  world  is  with- 
drawn from  circulation  either  for  state  hoards,  bank 
reserves,  or  for  private  hoarding.  In  1893-94  it  is 
estimated  that  more  than  three  hundred  million  dollars 
was  withdrawn  for  state  hoards.  When  we  consider 
the  large  amount  of  gold  held  by  the  Banks  of  Eng- 
land, France,  Germany,  Austria,  and  Italy,  the  large 
sums  Russia  has  locked  up  for  war  purposes,  the 
amount  held  in  reserve  in  the  United  States  Treasury, 
the  gold  coin  in  the  vaults  of  banking  institutions,  and 
what  is  hoarded  by  private  individuals,  it  will  be  seen 
that  but  little  gold  is  in  circulation. 

With  the  increase  of  population  and  of  production 
in  these  countries  comes  an  increased  demand  for 
gold.  Now  that  Japan,  Spain,  Greece,  Portugal,  Rou- 
mania,  Brazil,  Argentina,  Chili,  and  other  countries  are 
all  scrambling  for  this  metal,  what  little  there  is  in 
circulation  will  soon  be  entirely  withdrawn. 


56  MONEY   AND   PROSPERITY 

It  is  claimed  that  two  hundred  milHon  dollars'  worth 
of  new  gold  is  produced  annually,  and  that  the  money 
supply  will  be  enlarged  by  the  coinage  of  this  new  gold. 
There  is  not  more  than  one  hundred  and  fifty  million 
dollars'  worth  of  new  gold  produced  each  year  in  the 
entire  world,  and  the  mint  reports  show  only  a  slight 
annual  increase  in  the  gold  coin  of  the  world,  most 
of  the  new  gold  being  used  in  the  arts. 

The  advocates  of  the  gold  standard  insist  that  as 
most  of  the  business  of  the  country  is  transacted  with 
bank  credits,  checks,  bills  of  exchange,  and  drafts, 
when  "  confidence  is  restored"  no  material  increase  in 
our  money  supply  will  be  necessary.  Checks,  drafts, 
and  bills  of  exchange  could  not  exist  without  money; 
they  call  for  a  specific  sum  in  money,  and  a  certain 
amount  of  full  legal  tender  is  indispensable  as  a  basis 
of  credit.  Therefore,  if  this  amount  of  full  money  is 
increased,  credit  can  be  increased  and  more  business 
transacted.  Credit  is  usually  extended  to  its  utmost 
limit.  In  any  country,  clearing  houses  and  instru- 
ments of  credit,  instead  of  being  independent  of 
money,  are  limited  in  their  use  to  the  amount  of 
money  in  circulation  in  that  country,  and  can  only  be 
increased  as  the  volume  of  money  increases.  Since 
silver  was  demonetized  in  1873  the  commercial  value 
of  gold  has  doubled, — that  is  to  say,  general  prices 


THE   GOLD   STANDARD  57 

have  fallen  fifty  per  cent,,  which  indicates  that  the 
value  of  gold  has  risen  fifty  per  cent.  If  the  gold 
standard  is  permanently  established  in  the  United 
States  no  legislation  or  power  on  earth  can  prevent 
the  continuation  of  falling  prices. 

According  to  the  monthly  statements  of  the  Treas- 
ury Department  at  Washington,  there  is  about  seven 
hundred  million  dollars  of  gold  coin  in  the  United 
States,  Other  authorities  who  are  not  interested  in 
making  the  amount  appear  as  large  as  possible,  place 
the  total  at  five  hundred  million  or  six  hundred  million 
dollars. 

If,  according  to  the  rulings  and  opinions  of  some  of 
our  recent  Secretaries  of  the  Treasury,  most  of  our 
paper  money,  and  even  the  standard  silver  dollars,  are 
redeemable  in  gold,  and  if  we  have  but  five  or  six 
hundred  millions  of  full  redemption  money, — that  is 
to  say,  gold  money, — or  seven  hundred  millions,  if 
the  Treasurer's  report  be  accepted,  the  gold  standard 
advocates  should  instruct  their  subservient  newspapers 
not  to  publish  the  amount  of  gold  held  in  the  United 
States  Treasury,  nor  the  amount  hoarded  by  the  bank- 
ing institutions  of  the  country. 

On  April  5,  1898,  the  New  York  Herald,  in  an 
article  "  How  Sinews  of  War  would  be  obtained,"  said, 
"  The  Treasury  has  an  available  cash  balance  of  two 


58  MONEY   AND    PROSPERITY 

hundred  and  twenty-six  million  dollars,  of  which  one 
hundred  and  seventy-four  million  dollars  is  gold.  .  .  . 
Last  Saturday's  Clearing  House  statement  showed  that 
the  banks  of  this  city  hold  about  one  hundred  and 
forty-one  millions  specie,  presumably  nearly  all  gold." 
With  three  hundred  and  fifteen  million  dollars  of  this 
full  and  only  redemption  money  located  in  the  United 
States  Treasury,  and  in  one  city,  if  the  amount  in 
hoarding  in  the  banking  institutions  of  other  cities, 
and  in  private  hands,  could  be  ascertained,  there  would 
be  found'to  be  practically  none  in  circulation. 

Alexander  Hamilton  in  his  report  in  1791,  on  the 
establishment  of  a  mint,  declared  that  to  "annul  the 
use  of  either  gold  or  silver  as  money  is  to  abridge  the 
quantity  of  circulating  medium,  and  is  liable  to  all  the 
objections  which  arise  from  a  comparison  of  the  bene- 
fits of  a  full  circulation — rising  and  stable  prices — 
with  the  evils  of  a  scanty  circulation — falling  prices." 

The  Republican  party,  in  the  platform  adopted  at 
St.  Louis  in  1896,  declared  that  the  gold  standard 
should  be  maintained  until  international  bimetallism 
could  be  established,  but  knowing  this  to  be  impos- 
sible to  accomplish,  it  was  a  virtual  declaration  in 
favor  of  continuing  the  single  gold  standard.  Senator 
Teller,  an  ardent  Republican,  in  a  speech  delivered  at 
this  convention,  said,  "  I  believe  that  the  adoption  of 


THE   GOLD   STANDARD  59 

the  gold  resolution  will  produce  hardships ;  it  will  in- 
crease the  distress,  and  that  no  legislation  touching 
the  tariff  can  remove  the  difficulties  that  now  all  ad- 
mit prevail  in  this  land.  I  believe  that  the  whole 
welfare  of  my  race  is  dependent  upon  a  rightful  so- 
lution of  this  question  ;  that  the  morality,  the  civiliza- 
tion, nay,  the  very  religion  of  my  country  is  at  stake 
in  this  contest.  .   .  . 

"  I  say  to  you  now  that,  with  the  solemn  conviction 
upon  me  that  this  gold  plank  means  ultimate  disaster 
and  distress  to  my  followers,  I  cannot  subscribe  to  it, 
and,  if  adopted,  I  must,  as  an  honest  man,  sever  my 
connection  with  the  political  organization  which  makes 
this  one  of  the  main  articles  of  its  principles.  .  .  .  I 
cannot,  before  my  country  and  viy  God,  agree  to  that 
provision  that  shall  put  upon  this  country  a  gold 
standard,  and  I  will  not.'' 

The  Republican  party  is  committed  to  the  gold 
standard,  which  the  majority  of  the  members  of  that 
party  condemned  in  1896  in  the  St.  Louis  Convention, 
by  declaring  their  intention  to  abandon  it  for  inter- 
national bimetallism  as  soon  as  the  consent  of  other 
nations  could  be  obtained.  Nine-tenths  of  the  people 
of  the  United  States  favor  the  double  standard,  and 
would  welcome  international  agreement,  but  believe 
it  impossible  of  attainment,  and,  as  a  consequence,  the 


6o  MONEY  AND   PROSPERITY 

majority  favor  the  re-opening  of  our  mints  to  the  free 
and  unhmited  coinage  of  silver,  without  waiting  for 
the  co-operation  of  other  nations.  There  are,  how- 
ever, prominent  pohticians  who  prefer  the  single  gold 
standard. 

After  the  St.  Louis  Convention,  Senator  Lodge,  of 
Massachusetts,  said,  "  The  victory  won  by  the  Eastern 
States  in  forcing  the  word  gold  in  the  platform,  is  one 
that  every  business  man  and  financier  in  the  United 
States  will  appreciate  fully."  * 

Senator  Tom  Piatt,  of  New  York,  said,  "  Our 
friends  are  satisfied  with  the  results  of  their  efforts 
in  compelling  the  adoption  of  a  gold  standard  plat- 
form." t  The  present  administration  has  formulated 
and  sent  to  Congress  a  bill  the  purpose  of  which  is, 
the  Secretary  says,  "  to  commit  the  country  more 
thoroughly  to  the  gold  standard." 

At  a  banquet  of  the  Merchants'  and  Manufacturers' 
Association  in  Baltimore,  February  3,  1898,  Mr.  Gage, 
in  responding  to  the  toast,  "  The  Relation  of  Business 
to  Government  Finances,"  said,  "  I  desire  to  point  out 
the  fact  that  our  own  legal  tender  notes,  dear  as  they 
are  to  the  patriotic  heart,  serviceable  as  they  are  in  a 

*  St.  Louis  Post-Dispatch,  June  i8,  1896. 
f  Chicago  Record,  June  19,  1896. 


THE   GOLD   STANDARD  6i 

great  crisis,  are  yet  out  of  accord  with  the  true  eco- 
nomic laws.  The  value  for  which  they  were  origi- 
nally issued  was  immediately  consumed  or  destroyed. 
As  now  reissued  they  are  evidences  of  a  value  already 
consumed  by  the  issuer  or  of  service  already  past. 
These  notes  operating  in  the  commercial  field,  thus 
differentiated  from  the  time  credit  instruments  which 
commerce  can  create,  must  somewhere  work  injury, 
even  if  we  cannot  distinctly  point  it  out." 

It  is  a  great  pity,  sir,  that  "  our  own  legal  tender 
notes"  have,  in  such  an  obscure  way,  worked  so  much 
injury  to  our  people,  and  that  the  eminent  financier 
of  the  Treasury  is  unable  to  point  it  out.  The  rise 
and  fall  of  the  value  of  money,  the  rise  and  fall  of 
prices,  is  so  manifest  that  any  one  with  only  a  super- 
ficial knowledge  of  finances  could,  if  these  notes  had 
worked  any  injury,  "point  it  out."  The  truth  is, 
Mr,  Gage  knows  that  if  these  notes  could  be  "  de- 
stroyed" the  creditor  class  would  be  benefited  by  an 
appreciation  of  the  value  of  the  remaining  amount  of 
currency  in  the  country.  The  amount  being  reduced, 
general  prices  would  fall  to  meet  the  increased  demand 
for  money.  Moreover,  Mr.  Gage  and  other  bankers  of 
the  country  would  like  to  destroy  as  much  of  our  paper 
currency  as  possible,  and  thus  clear  the  way  for  the  gold 
standard  and  for  issues  of  paper  money  by  the  banks. 


62  MONEY   AND   PROSPERITY 

Compare  the  above  with  what  James  G.  Blaine 
said :  "  I  beHeve  the  struggle  now  going  on  in  this 
country  and  in  other  countries  for  a  single  gold 
standard  would,  if  successful,  produce  disaster  in  and 
throughout  the  commercial  world.  The  destruction 
of  silver  as  money  and  the  establishment  of  gold  as 
the  sole  unit  of  value  must  have  a  ruinous  effect  on 
all  forms  of  property  except  those  investments  which 
yield  a  fixed  return  in  money.  These  would  be  enor- 
mously enhanced  in  value,  and  would  gain  a  dispro- 
portionate, and  therefore  unfair,  advantage  over  every 
other  species  of  property.  If,  as  the  most  reliable 
statistics  affirm,  there  are  nearly  seven  thousand 
million  of  coin  or  bullion  in  the  world  not  very 
unequally  divided  betweeen  gold  and  silver,  it  is 
impossible  to  strike  silver  out  of  existence  as  money 
without  results  which  will  prove  distressing  to  mil- 
lions and  utterly  disastrous  to  tens  of  thousands." 

Between  1850  and  1857,  owing  to  the  great  increase 
in  the  output  from  the  mines,  gold  fell  in  value  to 
such  an  extent  that  Chevalier,  the  French  economist, 
in  his  work  "  On  the  Probable  Fall  in  the  Value  of 
Gold,"  said,  "  Those  two  countries — California  and 
Australia — must  have  yet  a  long  series  of  years  to 
produce  gold  in  such  quantities  and  on  such  condi- 
tions as  to  render  a  marked  decline  in  its  7ialne  inevi- 


THE   GOLD   STANDARD  63 


tabic.  .  .  .  We  must  regard  the  fall  in  the  value  of 
gold  as  an  event  for  which  we  should  prepare  without 
loss  of  time." 

Chevalier  and  other  writers  on  the  subject  of  money 
about  that  time  advocated  the  demonetization  of  gold. 
The  moneyed  class  actually  induced  Germany  to 
demonetize  gold.  The  moneyed  interests  and  their 
representatives  who  expected  to  be  benefited  by  the 
demonetization  of  one  of  the  metals  said,  "  As  gov- 
erments  control  the  weight  and  standard  of  money, 
they  ought,  so  far  as  possible,  to  assure  its  value." 
They,  therefore,  insisted  that  gold  should  be  demon- 
etized because  the  output  of  new  gold  was  being  so 
largely  increased  each  year.* 

The  annual  output  of  gold  for  the  year  1856  was 
one  hundred  and  forty-seven  million  six  hundred  thou- 
sand dollars  ;  in  1869  it  had  decreased  to  one  hundred 
and  six  million  two  hundred  and  twenty-five  thousand 
dollars.  The  attempts  towards  the  demonetization  of 
gold  ceased,  and  the  moneyed  interests  turned  their 
attention  towards  the  demonetization  of  silver,  which 
was  accomplished  in  1873.  If  gold  had  been  demon- 
etized instead  of  silver,  we  would  not  now  have  any 
advocates  of  the  gold  standard,  for  these  same  men 


*  Arguments  presented  to  the  French  Monetary  Commission  of  1869. 


64  MONEY   AND   PROSPERITY 

would  favor  a  single  silver  standard,  and  we  would 
hear  much  about  a  cheap  gold  dollar, — a  fifty-cent 
gold  dollar. 

Those  who  now  favor  the  double  standard  are 
called  anarchists.  If  they  are,  many  of  the  leading 
gold  standard  men  at  present  were,  until  very  re- 
cently, also  anarchists.  When  the  Sherman  law  was 
being  discussed  in  Congress,  in  1890,  as  a  substitute 
for  the  Bland-AUison  Act,*  Major  McKinley,  speaking 
in  support  of  the  bill,  said,  "  I  will  not  vote  against 
this  bill,  and  thus  deprive  the  people  of  my  country 
and  the  laborers  and  the  producers  and  the  industries 
of  my  country  of  thirty  million  dollars  annually  of 
additional  circulating  medium." 

Mr.  McKinley  wanted  the  double  standard  at  that 
time,  for  he  said,  "  I  am  for  the  largest  use  of  silver  in 
the  currency  of  the  country.  I  would  not  dishonor  it. 
/  tvould  give  it  equal  credit  with  gold.  I  would  make 
no  discrimination.  I  would  utilize  both  metals  as  money 
and  discredit  neither.     I  zvant  the  double  standard." 

He  wanted  the  double  standard  in  1890.  In  1896 
no  eeneral  change  in  the  laws  of  finance  had  taken 


*  The  Bland-Allison  Act  put  into  circulation  each  year  silver  to  the 
amount  of  twenty-four  million  dollars,  and  the  Sherman  law  increased 
that  amount  to  fifty-four  million  dollars. 


THE   GOLD   STANDARD  65 

place,  yet  Mr.  McKinley  was  induced  to  support  the 
gold  plank  of  the  St.  Louis  platform.  He  wanted  to 
be  President,  and  could  receive  the  support  and  en- 
dorsement of  the  moneyed  interests  only  by  pledging 
himself  to  maintain  the  gold  standard. 

Mr.  Bynum,  a  prominent  member  of  the  Indian- 
apolis Monetary  Commission,  in  a  speech  on  silver, 
delivered  in  Congress  in  1886,  said,  "  Again  the  ad- 
vocates of  gold  approach  us  with  open  hands  and 
smiling  countenances,  but  I  fear  with  a  dagger  con- 
cealed beneath  their  cloaks."  In  the  same  speech  in 
opposing  the  gold  standard  Mr.  Bynum  quoted  from 
Senator  Ingalls  as  follows :  "  No  enduring  fabric  of 
national  prosperity  can  be  builded  on  gold.  Gold  is 
the  money  of  monarchs  ;  kings  covet  it,  the  exchanges 
are  affected  by  it;  its  tendency  is  to  accumulate  in 
vast  masses  in  the  commercial  centres,  and  to  move 
from  kingdom  to  kingdom  in  such  volumes  as  to 
unsettle  values  and  disturb  the  finances  of  the  world ; 
it  is  the  instrument  of  gamblers  and  speculators,  and 
the  idol  of  the  miser  and  thief;  being  the  object  of  so 
much  adoration,  it  becomes  haughty  and  sensitive, 
and  shrinks  at  the  approach  of  danger ;  and  whenever 
it  is  most  needed,  it  always  disappears  ;  at  the  slightest 
alarm  it  begins  to  look  for  refuge;  it  flies  from  the 
nation  at  war  to  the  nation  at  peace ;  war  makes  it  a 

5 


66  MONEY   AND   PROSPERITY 

fugitive ;  no  people  in  a  great  emergency  ever  found 
a  faithful  ally  in  gold ;  it  is  the  most  cowardly  and 
treacherous  of  all  metals ;  it  makes  no  treaty  that  it 
does  not  break,  it  has  no  friend  whom  it  does  not 
sooner  or  later  betray.  Armies  and  navies  are  not 
maintained  by  gold ;  in  times  of  panic  and  calamity, 
shipwreck  and  disaster,  it  becomes  the  chief  agent 
and  minister  of  ruin  ;  no  nation  ever  fought  a  great 
war  by  the  aid  of  gold ;  on  the  contrary,  in  the  crises 
of  greatest  peril  it  becomes  an  enemy  more  potent 
than  the  foe  in  the  field ;  but  when  the  battle  is  won 
and  peace  has  been  secured,  gold  reappears  and  claims 
the  fruits  of  victory." 

The  moneyed  interests,  by  controlling  the  money 
supply,  reap  where  they  have  not  sown.  The  estab- 
lishment of  the  gold  standard  has  increased,  and  if 
maintained  will  continue  to  increase,  the  value  of  each 
dollar.  This  increase  in  the  value  of  gold  will  be 
shown  by  the  decrease  in  the  price  of  all  property 
and  commodities,  business  depression,  inability  to  pay 
debts,  and  an  increased  number  of  idle  laborers  and 
men  in  all  branches  of  business. 

People  generally  in  gold  standard  countries,  who 
have  given  but  little  thought  to  the  money  question, 
while  speaking  of  silver  as  declining  in  value,  never 
seem  to  think  that  gold  has  risen  in  value. 


THE  GOLD  STANDARD  67 

In  silver-using  countries  like  Mexico,  silver  instead 
of  gold  is  the.  measure  of  value,  and  the  people, 
realizing  that  silver  has  remained  practically  stable, 
know  that  gold  has  risen  in  value.  The  Mexican 
silver  dollar  will  buy  as  much  in  Mexico  to-day  as  it 
would  twenty  or  more  years  ago.  We  know  that 
the  value  of  silver  bullion  as  measured  in  gold  is  less 
than  half  what  it  was  in  1873.  To  ascertain  which  of 
the  metals  has  changed  in  value,  we  must  compare 
the  value  of  each  metal  with  a  list  of  general  prices 
of  commodities  in  1873  and  of  to-day.  It  will  be 
found  that  silver  has  practically  as  much  purchasing 
power  now  as  it  had  then,  and  gold  twice  as  much. 
Of  course  there  must  necessarily  be  a  few  temporary 
exceptions.  If,  for  instance,  a  commodity  like  wheat 
becomes  scarce,  the  demand  will  force  up  the  price 
temporarily.  When  the  supply  is  increased  the  price 
will  fall.  If  an  article  is  produced  in  quantities  which 
exceed  the  demand,  the  price  must  fall,  and  such  fall 
will  retard  production  until  the  demand  is  increased, 
when  the  price  will  rise.  The  rise  and  the  fall  in  the 
value  of  gold  and  silver  cannot  be  determined  by 
comparing  them  with  each  other,  or  by  the  rise  and 
the  fall  in  price  of  a  few  commodities.  If  we  take  the 
average  price  in  1873  of,  say,  one  hundred  commod- 
ities, and  find  that  the  bullion  value  of  silver  to-day 


68  MONEY   AND   PROSPERITY 

will  purchase  as  much  of  those  commodities  as  in 
1873,  and  that  the  bullion  value  of  gold  to-day  will 
purchase  twice  as  much  as  it  would  at  that  time,  it  is 
conclusive  evidence  that  gold  has  risen  in  value,  while 
the  value  of  silver  has  remained  practically  stable. 

Since  the  commencement  of  the  great  political  con- 
test of  1896,  the  publishers  of  most  of  the  large  daily 
newspapers  in  the  East,  as  well  as  many  in  the  West 
and  South,  finding  themselves  unable  to  produce  argu- 
ments based  on  facts  in  support  of  the  single  gold 
standard,  have  filled  their  papers  with  abuse  of  the 
advocates  of  bimetallism.  No  imputation  has  been 
too  unjust  and  no  language  too  violent  to  use  against 
those  who  favor  the  restoration  of  silver  by  admitting 
it  to  the  mints  in  free  and  unlimited  quantities  the 
same  as  gold.  The  policies  and  business  management 
of  these  great  modern  journals  are  dictated  either  by 
members  of  big  syndicates  or  by  wealthy  proprietors, 
who  in  some  instances  live  and  spend  their  money  in 
Europe.  As  a  rule,  the  able  men  engaged  on  a 
newspaper  have  little  to  do  in  determining  its  policy. 
The  proprietors  of  the  great  city  dailies  necessarily 
being  rich  men,  naturally  run  their  papers  in  the 
interest  of  the  moneyed  class.  Thousands  of  well- 
educated  men  in  this  country,  because  of  business 
pressure  and  lack  of  time  to  study  the  money  ques- 


THE   GOLD   STANDARD  69 

tion,  have  but  little  knowledge  of  the  subject,  except 
what  they  have  learned  by  reading  the  newpapers. 
They  are  naturally  led  to  suppose  that  journalists, 
being  in  constant  touch  with  exchanges  and  great 
banking  institutions,  whose  transactions  they  publish 
from  day  to  day,  must  be  correctly  informed  on  the 
money  question,  and  should,  therefore,  be  reliable. 
These  misinformed  people  should  seek  to  ascertain 
whether  or  not  the  monetary  laws  that  benefit  the 
rich  proprietor  of  their  favorite  daily  are  also  good 
for  them.  The  great  body  of  the  press,  however,  of 
this  country,  with  the  exception  of  these  gold  standard 
journals,  is  coming  over  to  the  support  of  the  people 
in  their  battle  for  bimetallism. 

The  moneyed  interests  of  Europe  and  this  country 
are  organized  for  the  maintenance  of  the  single  gold 
standard  in  the  United  States,  and  ever  since  the  de- 
monetization of  silver  in  1873,  they  have  been  lavish 
in  the  use  of  their  money  and  influence  in  controlling 
primaries  and  conventions,  and  dictating  political  plat- 
forms. Universities  are  endowed  for  the  purpose  of 
controlling  economic  teachings.  Statesmen,  so  called, 
have  been  induced  or  coerced  into  upholding  the  gold 
standard,  either  by  direct  bribes  or  promises  of  polit- 
ical preferment.  Aspirants  for  the  presidency  of  the 
United  States  have  been  compelled  to  submit  to  their 


70  MONEY   AND    PROSPERITY 

will   and   allow  them   to   dictate   and  promulgate  all 
financial  legislation. 

Well  may  the  members  of  this  organization  of  the 
moneyed  interests  be  called  "  Napoleons  of  finance," 
for  they  boldly  entered  their  enemy's  bimetallic  camp, 
and  finding  an  ambitious  "  major"  on  the  fence,  carried 
him  off  on  a  golden  litter.  They  set  up  before  the 
captive  a  presidential  throne,  all  glittering  with  gold, 
and  induced  him  to  repudiate  his  previous  declarations 
in  support  of  the  double  standard,  and  to  abandon  the 
cause  of  the  producing  and  industrial  classes. 


CHAPTER    VII 


HONEST    MONEY 


The  only  honest  money  is  that  which  maintains 
stabihty  of  prices.  All  who  defend  the  interests  of  an 
oppressed  people,  by  advocating  the  remonetization  of 
silver,  arc  constantly  called  cranks,  repudiators,  and 
anarchists.  Those  who  make  these  assertions  and 
who  have  so  often  been  accused  of  the  crime  of  1873 
and  of  dishonest  acts  in  manipulating  legislation 
favorable  to  money  contraction,  have  now  turned 
about,  and  the  robbers  accuse  the  robbed,  calling 
them  all  kinds  of  hard  names  because  they  refuse 
to  be  further  fleeced. 

The  money-changers  would  dry  up  the  arteries 
of  commerce  and  gain  still  further  control  of  the 
products  of  labor,  if  permitted,  by  "  more  thoroughly 
committing  the  country  to  the  gold  standard."  Was 
it  honest  in  1873,  when  the  business  classes  were 
depending  upon  the  free  coinage  of  both  gold  and 
silver  to  regulate  the  value  of  money,  to  surrep- 
titiously demonetize  one  of  these  metals  without  the 

71 


72  MONEY   AND    PROSPERITY 

knowledge  or  consent  of  the  voters  of  this  country  ? 
A  matter  of  enough  importance  to  double  the  entire 
debts  of  a  country  should  have  been  voted  on  at  the 
polls.  If  it  were  wrong  to  demonetize  silver  it  should 
be  remonetized,  and  the  wrong,  so  far  as  is  possible, 
should  be  righted.  Those  who  prate  so  much  about 
injuring  credit — meaning  creditors — have  no  sym- 
pathy for  the  injured  debtor.  The  gold  in  the  gold 
dollar,  though  it  has  doubled  in  value  since  1873,  is 
still  called  a  dollar,  and  will  be  so  called  as  long  as  it 
is  the  unit  of  value.  It  might  continue  to  increase  in 
value  until  it  would  be  worth  ten  times  as  much  as  it 
is  at  present,  and  though  it  would  command  ten  times 
as  much  property  it  would  still  be  a  dollar, — neither 
more  nor  less. 

Senator  John  P.  Jones,  on  October  24,  1893,  in 
addressing  the  United  States  Senate,  said,  "  The  gold 
standard  men  tell  us  that  all  they  ask  for  is  good 
money — honest  money.  If  that  is  so,  then  there 
must  be  some  monstrous  juggling  with  words;  for 
the  very  pith  and  marrow  of  our  contention  in  de- 
manding the  restoration  of  the  privilege  of  full  coinage 
to  silver  is  for  good  money,  honest  money, — a  money 
more  honest  than  gold,  a  money  that  shall  be  honest 
not  merely  to-day,  but  in  perpetuity.  The  acute 
among   the   gold    men   very   well    know   that   gold 


HONEST   MONEY  73 

money,   under   existing   conditions,  is   not  an  honest 
money,  but  an  unjust  and  essentially  dishonest  money. 

"  What,  then,  is  an  honest  dollar  ?  Is  it  not  a 
dollar  which  demands  at  all  times  the  same  degree  of 
sacrifice  to  obtain  it  ? 

"  Is  a  dollar  '  honest'  only  when  it  is  increasing  in 
purchasing  power, — when  it  is  enlarging  its  grasp 
over  the  products  of  labor  ?  Is  it  an  '  honest'  dollar 
only  when  it  is  exacting  more  from  the  debtor  than 
he  contracted  to  pay,  and  giving  more  to  the  creditor 
than  he  agreed  to  receive  ?" 

The  "  honorable"  and  "  patriotic"  gold  standard 
advocates  profess  to  have  great  fear  that  if  free  coin- 
age of  silver  is  again  adopted  the  laboring  men  will 
be  paid  in  depreciated  money, — "  fifty-cent  dollars." 
In  relation  to  what  would  silver  be  depreciated  ?  It 
could  be  only  in  relation  to  gold,  which  is  rising  in 
value,  for  silver  when  compared  with  commodities 
has  remained  practically  stable.  It  could  not  be  in 
relation  to  the  products  of  labor,  for  an  enlarged 
supply  of  currency  raises  general  prices,  stinmlates 
production,  and  gives  more  and  better  employment  to 
labor. 

It  is  asked,  how  can  the  free  and  unlimited  coinage 
of  silver  put  money  into  the  pockets  of  the  laboring 
man  ?     When  silver  is  remonetized  every  branch  of 


74  MONEY   AND   PROSPERITY 

business  will  be  benefited  by  rising  prices,  until  the 
steady  level  of  the  bimetallic  standard  is  reached ; 
and,  as  all  classes  of  industry  prosper  when  prices  are 
rising  or  continue  steady,  the  working-man  will  not  only 
be  immediately  benefited,  but  will  continue  to  pros- 
per and  receive  a  greater  share  of  the  products  of  his 
labor.  The  moneyed  interests,  however,  would  have 
to  be  content  with  less.  Wages  are  low  because  the 
supply  is  much  greater  than  the  demand.  When  all 
the  laboring  men  are  at  work,  the  ruinous  competition 
for  employment  ceases ;  they  can  demand,  and  their 
employers  can  afford  to  pay,  better  wages. 

The  people  were  told,  in  1893,  that  all  that  was 
necessary  to  restore  prosperity  was  to  repeal  the 
so-called  Sherman  law ;  that  prices  would  be  better, 
and  the  wheels  of  progress  would  again  move  on. 
The  coinage  of  fifty-four  million  dollars  of  silver, 
yearly,  was  discontinued,  and  prices  have  fallen  since 
that  time  twenty  per  cent.  Now  this  same  class  of 
"honorable"  and  "patriotic"  men  would  destroy  all 
our  money  except  gold,  which  is  too  scarce  and  dear 
to  circulate,  and  permit  the  banks  to  control  our  cur- 
rency in  their  interest  to  the  great  detriment  of  the 
people.  They  say  "  the  government  should  go  out  of 
the  banking  business."  Some  one  has  said  that  "  the 
banks  should  go  out  of  the  governing  business." 


HONEST   MONEY  75 

Debtors  suffer  loss  in  proportion  to  the  increase  in 
the  value  of  money.  They  are  obliged  to  settle  their 
debts  in  dollars  having  greater  value  than  at  the  time 
the  debts  were  contracted.  A  rise  in  general  prices — 
a  fall  in  the  value  of  money — is  the  loadstone  that 
brings  out  the  hoarded  gold  and  uninvested  funds. 
Money  cannot,  other  things  remaining  the  same,  fall 
in  value  except  by  an  increase  of  the  amount  in  cir- 
culation. When  money  is  falling  in  value  it  becomes 
more  profitable  for  the  holders  of  it  to  invest  in  goods 
and  property  which  are  rising  in  value.  When  money 
is  falling  or  stable  in  value  it  is  not  hoarded  and  does 
not  accumulate  in  the  banks.  All  want  to  get  rid  of 
it  for  things  that  are  rising  or  stable  in  value.  If 
prices  of  commodities  are  rising  in  value  the  investor 
is  benefited  as  well  as  the  producer,  for  what  he  buys 
one  month  will  have  more  value  the  next  month  and 
the  next  year. 

We  have  been  hearing  much  about  "  maintaining 
the  parity  of  all  our  money,"  an  "  honest"  dollar, 
"  good"  money,  and  "  sound"  money.  Parity  with 
what?  Parity  with  the  dollar  that  is  constantly 
rising  in  value, — the  gold  dollar?  What  the  pro- 
ducing classes  want  is  a  dollar  that  will  be  at  a 
parity  with  commodities.  When  the  advocates  of 
the    gold    standard    speak    of    an    "  honest"    dollar. 


76  MONEY   AND   PROSPERITY 

"  good"  money,  and  "  sound"  money,  they  have  in 
mind  gold  money.  If  our  country  should  become 
involved  in  a  war  of  much  magnitude  all  these 
"  honorable"  and  "  patriotic"  men  would  call  in 
what  little  of  this  "  good"  and  "  sound"  money  might 
be  in  circulation  and  lock  it  safely  up,  and  paper 
money  and  the  plain  people  would  have  to  fight  the 
battles  as  in  the  past.  All  this  talk  about  "  sound" 
money,  "  good"  money,  etc.,  simply  means  gold 
money.  Why  are  not  the  gold  advocates  honest 
enough  to  speak  of  it  as  gold  ?  They  want  a  financial 
system  based  upon  gold,  and  fail  to  show  where  the 
gold  is  coming  from.  They  tell  us  confidence  must 
be  restored  and  plenty  of  "  good,"  "  sound"  money  will 
be  in  evidence.  Confidence  is  not  a  thing  to  be  called 
into  existence  simply  by  the  exercise  of  the  will  of 
man.  It  must  be  based  on  something  more  tangible. 
It  is  inconceivable  that  men  with  ordinary  intelli- 
gence cannot  understand  that  the  gold  dollar  is  valu- 
able only  for  what  it  will  obtain  in  exchange ;  that 
money  is  the  creation  of  law,  and  that  if  the  demand 
for  money  is  greater  than  the  supply,  the  value  of 
the  dollar  will  rise, — will  have  greater  purchasing 
power;  that  if  you  have  more  dollars  than  are  ne- 
cessary to  meet  the  demand  for  money,  they  will  fall 
in  value, — will  possess  less  purchasing  power;    that 


HONEST   MONEY  77 

the  producing  classes — those  engaged  in  general 
industries — and  the  distributors  of  wealth  are  bene- 
fited by  an  ample  supply  of  full  legal  tender  money, 
and  that  it  is  the  aim  and  in  the  interest  of  the 
creditor  class  to  keep  the  number  of  dollars  in  cir- 
culation down  to  the  smallest  amount  possible. 

President   Cleveland,  his  banker   friends,   and    the 
holders  of  money  and  bonds,  claimed  that  the  fifty- 
four    millions    of  standard    silver   dollars   which    the 
government    put    into    circulation    by   the    Sherman 
law  of   1890  produced  the  panic  of   1893,  and  that 
if  the  government  would  stop  the  purchase  of  silver, 
prosperity  would  be  restored.     The  law  was  repealed, 
and  instead  of  restoring  prosperity,  two  hundred  and 
sixty-two    million    dollars   of  bonds    were    issued    in 
order  to  maintain  the  gold  reserve  in  the  Treasury. 
It  must  be  remembered  that  the  sale  of  these  bonds 
for  gold  was  not  made  until  some  time  after  the  repeal 
of  the  law  which,  it  was  claimed,  produced  the  panic. 
Bondholders,  and    the   moneyed    interests    generally, 
knew  they  had  nothing  to  fear  from  the  further  out- 
put of  the  standard  silver  dollars.     Yet  this  assur- 
ance did  not  prevent  the  raid  on  the  United  States 
Treasury.     The  increase  in  the  bonded  debt  of  the 
United    States    in    1894-95,    during    profound    peace, 
was   entirely  without  excuse.     If  the   Secretary  had 


78  MONEY   AND   PROSPERITY 

insisted  upon  maintaining  the  legal  right  of  the  gov- 
ernment to  redeem  its  coin  obligations  in  either  silver 
or  gold  instead  of  surrendering  the  option  to  the 
holder  of  the  obligation,  no  necessity  for  the  issue  of 
interest-bearing  bonds  to  obtain  gold  in  time  of  peace 
would  have  arisen. 

Must  our  government  depend  upon  the  dealers  in 
money  and  securities  for  its  supply  of  redemption 
money?  Shall  the  government  be  at  the  mercy  of 
those  who  are  pecuniarily  benefited  by  bond  issues  ? 
In  1893  the  moneyed  interests  and  their  subsidized 
newspapers  attempted  to  show  that  no  more  silver 
money  would  circulate,  yet  bankers  and  merchants, 
in  order  to  obtain  it,  actually  paid  a  premium  for  it, 
ranging  from  one-half  to  three  per  cent. 

On   August   5,   1893,  the  following  advertisement 

appeared  in  the  New  York  Times  and  the  New  York 

Herald  : 

"  WANTED— SILVER  DOLLARS. 

We  desire  to  purchase  at  a  premium  of  3^  per  cent.,  or 
57.50  per  thousand,  standard  silver  dollars,  in  sums  of  ^looo 
or  more,  in  return  for  our  certified  checks  payable  through 
the  clearing  house. 

Zimmerman  &  Forshay,  Bankers, 

II  Wall  Street." 

It  is  not  necessary  that  silver  dollars  should  circu- 
late except  for  use  as  change,  as  silver  certificates  in 


HONEST   MONEY  79 

any  denomination,  from  one  dollar  up  to  any  amount, 
can  be  issued  and  put  into  circulation  to  take  the  place 
of  silver  dollars. 

President  Harrison,  in  one  of  his  messages  to  Con- 
gress, after  the  law  of  1890  was  passed,  said  that 
the  fifty-four  millions  put  into  circulation  annually 
equalled  only  one  per  cent,  of  the  increase  of  popu- 
lation and  business,  and  that  this  new  money,  going 
out  into  all  kinds  of  business  enterprises,  saved  the 
country  from  a  money  stringency  at  the  time  of  the 
Baring  failure.  If  this  comparatively  small  amount 
of  new  money,  equal  to  only  one  per  cent,  of  the  in- 
crease of  population  and  business,  could  prevent  a 
stringency  of  money  at  the  time  of  the  Baring  failure, 
a  money  stringency, — falling  prices, — resulting  in  busi- 
ness depression,  might  reasonably  have  been  expected 
if  the  supply  were  discontinued. 

The  fact  that  after  a  lapse  of  five  years  prosperity 
is  not  yet  restored,  except  to  a  limited  number,  mostly 
importers,  is  conclusive  evidence  that  the  panic  of 
1893  was  not  caused  by  the  purchase  of  silver  prior 
to  the  repeal  of  the  purchasing  clause  of  the  Sherman 
law.  The  absurd  and  false  theory  that  the  new  money 
put  into  circulation,  by  the  law  of  1890,  produced  the 
panic,  has  therefore  to  be  abandoned. 

The  only  honest  dollar  is  one  that  will  keep   at  a 


8o  MONEY  AND   PROSPERITY 

parity  with  the  products  of  labor,  and  not  the  dollar 
that  is  constantly  advancing  in  value.  The  coinage 
of  the  standard  silver  dollar  between  1890  and  1893 
partially  retarded  the  rising  value  of  the  gold  dollar, 
but  now  the  gold  dollar  will  continue  to  rise  in  value 
until  more  full  legal  tender  money  is  put  into  circu- 
lation, and,  as  a  consequence,  the  gold  dollar  will  as 
time  passes  become  a  more  dishonest  dollar. 


CHAPTER    VIII 

FALLING    PRICES 

Since  the  demonetization  of  silver,  gold  has  been 
so  steadily  appreciating  in  value  that  its  purchasing 
power  is  now  double  what  it  was  in  1873.  The  gold 
dollar  being  the  unit  of  value,  we  cannot  speak  of  gold 
as  being  at  a  premium  of  one  hundred  per  cent. ;  but 
this  is  practically  true,  for  its  piircJiasing  pozvcr  has 
been  so  increased  that,  when  compared  with  its  com- 
mand over  commodities  in  1873,  it  is  actually  at  a 
premium  of  one  hundred  per  cent.  The  only  way  to 
determine  the  rise  in  the  value  of  gold  is  by  ascertain- 
ing the  extent  of  the  fall  of  general  prices.  When  it 
is  clearly  understood  that  money  measures  values,  it 
will  be  seen  at  a  glance  that  when  general  prices  fall, 
other  things  remaining  the  same,  the  value  of  money 
rises,  and  that  when  general  prices  rise  the  value  of 
money  falls.  The  claim  of  the  single  gold  standard 
advocates,  that  the  fall  in  general  prices  has  been 
caused  by  cheapening  the  cost  of  production,  cannot 
be  substantiated. 

6  81 


82  MONEY   AND   PROSPERITY 

By  reference  to  the  Statistical  Abstract  of  the  United 
States,  prepared  by  the  Bureau  of  Statistics,  under  the 
direction  of  the  Secretary  of  the  Treasury,  it  will  be 
seen  that  a  great  fall  in  general  prices  has  occurred 
since  1873,  and  that  the  beginning  of  the  downward 
tendency  was  coincident  with  the  demonetization  of 
silver.  Silver  was  at  that  time  worth  one  dollar  and 
thirty-two  cents  per  ounce;  its  value  now  is  about  sixty 
cents  per  ounce,  as  measured  in  gold.  Take  the  five 
leading  staples — wheat,  corn,  oats,  cotton,  and  wool — 
and  note  the  rise  and  fall  of  prices  of  these  commodi- 
ties as  related  to  the  increase  and  decrease  of  our 
money  supply.  The  prices  given  by  the  Statistical 
Abstract  are  for  these  products  delivered  in  New  York 
and  Eastern  markets.  The  amount  received  by  the 
producers  for  these  staples  was  much  less. 

In  1872  wheat  was  worth  one  dollar  and  forty-seven 
cents  per  bushel ;  in  1895  the  price  had  fallen  to  fifty- 
eight  cents  per  bushel.  Of  course  it  is  to  be  expected 
that  at  times  one  or  more  of  the  hundreds  of  com- 
modities will  materially  rise  or  fall  in  price  from  va- 
rious causes.  The  gold  price  of  wheat  was  recently 
— owing  to  scarce  crops  and  Chicago  manipulation — 
forced  up  to  one  dollar  and  eighty-five  cents  per 
bushel.  The  price  is  now  about  seventy  cents  per 
bushel.     With  good  crops  in  this  country  and  abroad 


FALLING   PRICES  83 

wheat  will,  under  the  gold  standard,  resume  its  former 
price  of  fifty-eight  cents  per  bushel,  and  will  continue 
falling  if  the  present  monetary  system  is  maintained. 
For  one  or  two  commodities  to  rise  materially  in  price, 
while  the  general  trend  of  the  whole  is  downward, 
does  not  in  any  way  destroy  the  claims  made  by  bi- 
metallists,  that  the  constant  fall  in  general  prices  since 
silver  was  demonetized  has  been  due  to  an  insufficient 
money  supply. 

In  1872  the  price  of  corn  in  the  New  York  market 
was  seventy  cents  per  bushel;  in  1896  it  had  fallen  to 
thirty-eight  cents  per  bushel.  In  1873  the  value  of 
the  yield  per  acre  of  oats  was  ten  dollars  and  thirty- 
eight  cents;  in  1895  it  had  fallen  to  five  dollars  and 
eighty-seven  cents  per  acre. 

Prior  to  the  great  gold  discoveries  in  California  and 
Australia,  in  1848,  when  general  business  depression 
prevailed  all  over  the  land,  the  price  of  middling  cotton 
per  pound  in  the  New  York  market  was  eight  cents. 
In  1864,  when  the  per  capita  of  the  United  States 
was  about  sixty-five  dollars,  it  sold  for  one  dollar 
per  pound;  in  1873  it  was  worth  twenty  cents  per 
pound,  and  the  price  has  recently  fallen  to  less  than 
seven  cents  per  pound.  In  1865  fine  Ohio  fleece  wool 
sold  in  the  Eastern  markets  for  one  dollar  per  pound ; 
in   1873  it  was  worth  seventy  cents;  and  in   1895  the 


84  MONEY   AND   PROSPERITY 

price  had  fallen  to  sixteen  and  one-half  cents  per 
pound. 

It  costs  as  much  now  to  grow  the  wool  on  the 
sheep's  back  as  it  did  in  1873,  and  hundreds  of  other 
articles  could  be  named  which  cost  as  much  to  pro- 
duce now  as  then,  yet  prices  have  fallen  one-half  since 
that  time.  The  cost  of  production  of  many  com- 
modities has  undoubtedly  fallen,  but  the  lowering  of 
such  cost  of  certain  products  does  not  account  for  the 
great  fall  of  general  prices.  Lessening  the  cost  of 
production  of  any  given  number  of  articles  should  not 
necessarily  lower  the  price  of  the  same.  If  it  costs 
less  to  produce,  profits  should  be  greater  and  wages 
higher.  There  should  be  a  greater  and  constantly 
increasing  demand  for  labor ;  and  when  the  laboring 
classes  are  engaged  in  the  production  of  wealth,  the 
distributors  of  wealth  should  find  employment.  No 
panic  has  ever  been  produced  by  lowering  the  cost  of 
production  of  commodities. 

The  gold  standard  men  are  compelled  to  admit  that 
the  fall  of  general  prices  began  the  year  silver  was 
demonetized.  They  claim  that  the  fall  of  prices  is 
not  due  to  the  demonetization  of  silver,  but  to  im- 
proved methods  of  production.  One  would  conclude, 
if  not  otherwise  informed,  that  the  only  new  inven- 
tions and  improvements  in  the  various  arts  have  been 


FALLING   PRICES  85 

inaugurated  since  silver  was  demonetized.  There  has 
been  no  period  in  our  history  as  a  nation  that  has 
given  birth  to  more  great  inventions,  improved  ma- 
chinery, and  means  to  reduce  the  cost  of  commodities 
than  that  between  1850  and  1873,  yet  general  prices 
were  steadily  rising  during  that  time.  Increasing 
or  steady  prices  are  a  most  powerful  incentive  to 
induce  men  to  work  and  to  produce  an  abundance 
of  wealth.  Fewer  than  three  per  cent,  of  the 
people  of  the  United  States  are  benefited  by  falling 
prices. 

Since  silver  was  demonetized  all  of  the  principal 
agricultural  staples  have  been  declining  in  price.  At 
times,  owing  to  scarcity,  some  few  have  been  higher ; 
but  the  trend  of  the  whole  has  been  persistently 
downward.  The  mower,  the  self-binder,  the  gang- 
plough,  hay-tedder  and  hay-loader,  and  many  other 
improvements  in  agricultural  machinery,  were  in  use 
prior  to  1878,  therefore  the  theory  that  improved 
methods  of  production  have  materially  lowered  the 
cost  of  production  of  farm  products  is  not  in  accord 
with  known  facts.  The  prices  of  many  of  the  tools 
and  implements  that  the  farmer  uses  have  fallen ;  but 
his  annual  outlay  for  such  articles  is  small  compared 
with  the  total  price  of  all  his  products.  Statistics 
show  that  the  value  of  the  average  yield  per  acre  of 


86  MONEY   AND   PROSPERITY 

wheat,  corn,  oats,  and  cotton  has,  since  1873,  fallen 
more  than  fifty  per  cent.  The  price  of  these  staples, 
with  the  exception  of  the  temporary  price  of  wheat, 
is  much  below  the  cost  of  production,  therefore  the 
farmer  is  not  only  without  the  means  to  obtain 
money  with  which  to  purchase  farming  implements 
and  household  necessities,  but  is  rapidly  losing  his 
honest  and  hard-earned  possessions.  Thousands  of 
farmers,  who  formerly  cultivated  their  own  farms  and 
reared  contented  and  independent  families,  have  been 
reduced  to  the  position  of  day-laborers  through  no 
fault  of  their  own.  When  nearly  half  the  population 
of  the  United  States  is  deprived  of  its  power  to  pur- 
chase manufactured  articles,  those  engaged  in  manu- 
facturing industries  must  suffer.  Mills  and  furnaces 
must  close,  business  failures  ensue,  and  operatives 
and  the  distributors  of  wealth  must  be  thrown  out  of 
employment  and  deprived  of  the  ability  to  purchase 
anything  except  the  veriest  necessaries.  Deprive  the 
producers  of  our  farm  products  of  practically  all 
purchasing  power,  and  the  disastrous  effects  will  be 
felt  in  every  branch  of  business.  Unprofitable  prices 
force  the  farmer  to  mortgage  his  farm,  which  sooner 
or  later  is  sold  for  debt,  and,  finding  it  impossible  to 
make  a  living  by  farming,  he  goes  to  the  towns  and 
cities  and   swells   the   ranks   of  the   unemployed.     If 


FALLING    PRICES  87 

prices  were  at  this  time  equal  to  those  which  pre- 
vailed at  the  time  silver  was  demonetized,  the  farmers 
would  this  year  be  able  to  spend  nearly  two  billion 
dollars  more  than  is  possible  for  them  to  spend  at  the 
present  prices  of  their  products. 

The  following  from  the  Farm,  Field,  and  Fireside, 
February  2,  1895,  is  in  point:  "Is  the  sturdy,  self- 
respecting,  independent  American  farmer  decreasing 
in  number  and  being  replaced  by  the  poor  starveling 
renter  ?  A  careful  student  of  the  conditions  here  and 
abroad,  Mr.  F,  P.  Powers,  says  that  he  is.  Mr. 
Powers  quotes  figures.  Between  1880  and  1890  the 
number  of  land-owning  farmers  decreased  in  every 
New  England  State  and  the  number  of  tenant-farmers 
increased.  In  each  of  these  States  there  was  a  marked 
increase  in  the  percentage  of  farmers  who  ploughed 
the  fields  of  another  man,  and  in  the  sweat  of  whose 
brow  somebody  in  Boston  ate  cake.  In  the  six 
States,  in  the  ten  years,  the  land-owning  farmers  dimin- 
ished twenty-four  thousand  one  hundred  and  seven- 
teen, and  the  tenant-farmers  increased  seven  thousand 
two  hundred  and  forty-six.  The  percentage  of  tenant- 
farmers  in  Massachusetts,  though  not  large  in  1890, 
was  nearly  double  what  it  was  in  1880.  Over  seven- 
teen per  cent,  of  the  farmers  in  Vermont  and  Con- 
necticut and  twenty-five  per  cent,  of  the   farmers   in 


88  MONEY   AND    PROSPERITY 

Rhode  Island  were  tenants  in   1890.     In  the  Western 
States  the  same  process  is  going  on." 

For  centuries  the  precious  metals  continued  to  waste 
away  by  abrasion,  by  the  result  of  war,  as  hidden 
treasure,  and  by  accidents  of  shipwreck.  This  con- 
stant decrease  of  the  metals  went  on  unchecked,  with 
the  result  that  the  immense  amount  possessed  by  the 
world  at  the  beginning  of  the  Christian  era  dwindled 
away  until  at  length  it  was  reduced  to  only  a  small 
fraction  of  its  original  quantity.  After  Columbus  dis- 
covered the  New  Continent  the  annual  supply  of  the 
metals  was  trebled  by  the  output  from  the  new  mines 
of  America  ;  a  new  period  of  rising  prices  set  in,  result- 
ing in  general  prosperity,  which  enabled  the  people  to 
throw  off  the  weight  of  feudalism  and  oppression.  The 
annual  supply  of  gold  and  silver  from  1802  to  1848 
was  greatly  reduced,  and  resulted  in  a  very  great  fall 
in  general  prices.  Neither  of  the  precious  metals  was 
demonetized  during  that  time,  and  both  were  mined 
more  or  less  and  coined  into  money,  but  the  supply 
was  not  sufficient  to  meet  the  increasing  demand 
arising  from  the  growth  of  population  and  business. 
In  1809  war  broke  out  between  Spain  and  her  Ameri- 
can colonies,  and  the  people,  being  engaged  most  of 
the  time  in  warfare,  neglected  the  mining  of  the 
precious  metals,  and  as  a  consequence  the  supply  fell 


FALLING    PRICES  89 

off.  General  prices  fell  more  than  fifty  per  cent,  be- 
tween 1802  and  1848.  When  prices  began  to  fall 
general  depression  set  in,  and  then  as  now  the  cause 
was  said  to  be  over-production.  Capital  avoided 
business  enterprises  because  so  many  were  constantly 
failing.  Manufacturers  in  trying  to  make  profits  from 
the  investment  of  capital  resorted  to  every  possible 
means  that  ingenuity  could  suggest  to  reduce  the  cost 
of  production.  Improved  methods,  longer  hours  for 
the  workmen,  and  starvation  wages  for  employees  were 
of  no  avail  against  a  constant  fall  in  general  prices. 
The  relief  came  soon  after  the  great  discoveries  of 
gold  in  California  and  Australia  in  1850. 

Mr.  Robert  Giffen,  statistician  to  the  London  Board 
of  Trade,  though  a  gold  monometallist,  is  honest 
enough  to  admit  some  of  the  bimetallists'  claims, 
which  is  more  than  can  be  said  of  most  of  those  of 
his  belief  in  this  country.  Mr.  Giffen  clearly  recog- 
nizes that  when  money  is  scarce  more  commodities 
must  be  given  to  obtain  it  than  when  it  is  plentiful. 
In  his  work  "  The  Case  against  Bimetallism,"  he 
says,  "  If  we  were  told  that  copper  or  iron  or  wheat 
were  rising  because  there  was  a  deficiency  of  the  sup- 
ply of  them  to  meet  all  the  demands,  we  should  ac- 
cept the  statement  as  a  matter  of  course.  But  what 
is  true  of  copper   or  iron  or  wheat  must  equally  be 


90  MONEY   AND    PROSPERITY 

true  of  any  commodity  which  happens  to  be  the 
standard  monetary  substance.  If  gold  or  silver  is 
that  substance,  and  gold  or  silver  is  increasingly  in 
demand  without  any  corresponding  increase  in  supply, 
then  people  who  want  gold  or  silver  for  any  purpose 
must  give  more  for  them. 

"  We  see,  then,  how  widely  mistaken  those  mono- 
metallists  have  been  who,  in  their  dislike  of  bimetal- 
lism, have  denied  that  the  recent  great  demands  for  gold 
in  proportion  to  its  supply  were  likely  to  have  caused  a 
rise  in  its  exchange  value  for  other  things.  Looked 
at  in  this  way,  the  fall  of  prices  is  itself  a  proof  that 
gold,  in  relation  to  all  the  demands  for  it,  has  been 
relatively  scarcer  than  it  was.  Everybody  who  has 
wanted  it  has  had  to  give  more  for  it.  If  everybody 
who  wanted  coal  or  pig-iron  was  giving  more  for  it 
than  before,  we  should  not  hesitate  to  say  that  coal  or 
pig-iron  were  relatively  more  in  demand  than  they  had 
been ;  and  what  we  should  say  of  coal  and  pig-iron 
we  must  also  say  of  gold  or  silver  in  a  like  case." 

Mr.  Giffen  read  a  paper  before  the  Statistical  So- 
ciety of  London  in  1879,  in  which  he  said,  "There  is 
a  general  agreement  that  during  the  last  few  years 
there  has  been  a  heavy  fall  in  prices.  ...  It  is  usually 
a  fall  in  price  which  cripples  the  weaker  borrowers 
and  causes  bad  debts,  and  this  is  a  beginning  of  losses 


FALLING   PRICES  91 

by  which  stronger  borrowers  are  in  turn  crippled, 
further  falls  in  prices  ensue,  and  more  bad  debts  and 
losses  are  produced.  When  we  see  so  many  failures 
as  are  now  declared,  therefore,  we  may  be  sure  that 
they  are  preceded  and  accompanied  by  a  heavy  fall  in 
prices." 

It  has  been  said  that  wages  are  nearly  as  high  now 
as  they  were  when  silver  was  demonetized ;  and  that 
in  some  cases  they  are  higher.  Wages  for  skilled 
labor  in  or  near  great  manufacturing  centres  have  in- 
creased to  some  extent;  but  in  all  the  outlying  dis- 
tricts, especially  in  the  South  and  West,  wages  have 
decreased.  When  we  consider  the  number  of  laborers 
who  are  unable  to  obtain  employment  and  are,  in  con- 
sequence, more  or  less  of  the  time  not  receiving  any 
wages  at  all,  it  will  be  found  that  the  total  amount 
paid  the  wage-earning  class,  in  proportion  to  the  total 
number  of  laborers,  will  have  decreased  since  silver  was 
demonetized.  Suppose  that  skilled  labor  is  receiving 
more  wages  at  the  present  time,  it  is  no  argument 
that  it  is  due  to  the  gold  standard.  Since  wage- 
earners  began  to  organize  they  have  constantly  in- 
creased their  demands  for  more  wages,  and  when  not 
successful  they  often  prevent  a  reduction  in  their 
wages.  Besides,  as  a  nation  increases  in  wealth  and 
productive  power  wages  should  increase,  even  with  a 


92  MONEY   AND   PROSPERITY 

monetary  standard  worse,  if  possible,  than  the  present 
gold  standard  of  this  country. 

A  rise  in  general  prices  signifies  that  money  is  fall- 
ing in  value  because  of  an  increase  in  its  volume.  At 
such  times  manufacturers  are  not  afraid  to  invest  capi- 
tal in  mills  and  raw  material,  for  they  know  that  the 
finished  products  will  sell  for  more  than  the  cost  of 
production.  Wages  are  not  cut  down,  and  laborers 
are  sure  of  constant  employment. 

Appreciation  of  money  induces  holders  of  it  to 
hoard  and  invest  only  in  bonds,  instead  of  industries. 
Large  amounts  of  capital  accumulate  in  the  banking 
institutions.  Bonds  paying  four,  three,  and  even  two 
per  cent,  are  in  great  demand.  The  money-lenders 
avoid  new  undertakings  and  business  enterprises,  and 
their  bond-holding  instinct  and  greed  to  clutch  gold 
increases  as  the  value  of  money  increases.  The  farm- 
ers, owing  to  their  small  capital  and  inability  to  com- 
bine or  stop  producing,  are  the  first  to  be  affected  by 
faUing  prices.  So  long  as  this  condition  of  things 
lasts  we  will  have  hard  times  and  our  streets  will  con- 
tinue to  be  filled  with  hungry  and  insufficiently  clothed 
men,  women,  and  children. 

Our  farmers,  mechanics,  laborers,  manufacturers, 
and  distributors  of  wealth  are  beginning  to  realize 
that  the  cause  of  falling  prices  is  currency  contraction. 


FALLING   PRICES  93 

They  know  that  each  year  they  have  to  give  up  more 
of  the  products  of  labor  to  obtain  the  dollar,  and  that 
all  kinds  of  property,  except  centrally  located  real 
estate  in  large  cities  and  public  and  private  bonds  pay- 
able in  money,  must,  if  sold,  be  disposed  of  at  re- 
duced prices.  The  trusts,  monopolies,  and  advocates 
of  the  gold  standard  must  be  made  to  understand  that 
they  are  not  the  sole  law-makers  of  this  republic; 
that  Congress  has  the  power  "  to  coin  money  and 
regulate  the  value  thereof;"  that,  as  gold  is  too  scarce 
and  dear.  Congress  must  regulate  its  value  by  giving 
the  people  more  money  by  the  free  coinage  of  silver, — 
the  money  of  our  Constitution.  The  monometallists 
must  be  compelled  to  remove  the  corroding  shackles 
from  the  feet  of  industry.  Labor  shall  not  be  en- 
slaved, as  during  the  decadence  of  the  Roman  empire, 
and  civilization  shall  not  be  extinguished,  as  was 
nearly  done  during  the  Dark  Ages. 


CHAPTER    IX 

THE  FREE  AND  UNLIMITED  COINAGE  OF  BOTH  GOLD 
AND  SILVER  AT  THE  PRESENT  LEGAL  RATIO  OF 
SIXTEEN  TO  ONE  BY  THE  INDEPENDENT  ACTION  OF 
THE    UNITED    STATES 

When  a  physician  is  called  in  to  treat  a  patient, 
the  first  and  most  difficult  thing  he  encounters  is  the 
making  of  a  correct  diagnosis  of  the  case.  When 
the  cause  of  the  malady  is  ascertained  the  remedy 
may  be  quickly  and  effectively  applied.  This  country 
is  afflicted  with  an  insufficient  metallic  money  supply. 
Many  have  urged  that  international  bimetallism 
should  be  accepted  as  a  remedy.  This,  however,  is 
not  practical,  for  the  reason  that  other  nations  refuse 
to  adopt  the  double  standard.  But  why  will  not  in- 
dependent bimetallism  effect  the  desired  cure  ?  Bi- 
metallists  believe  it  will.  One  thing  is  certain :  if 
the  gold  standard  is  not  abandoned  it  will  further 
impoverish  our  people  by  continuing  to  force  prices 
down,  stop  production,  retard  industry  and  progress, 
and  deprive  the  people  of  purchasing  power. 

Owing  to  the  fact  that  the  population  of  the  United 
94 


INDEPENDENT   ACTION  95 

States  has  more  than  doubled  in  the  last  thirty  years, 
the  demand  for  money  has  enormously  increased. 
Large  sums  are  constantly  in  demand  for  the  develop- 
ment of  our  unimproved  lands  and  new  industrial 
enterprises.  It  is,  therefore,  absurd  to  maintain  that 
a  material  increase  in  our  annual  money  supply  would 
not  immediately  be  absorbed  by  our  industrious  and 
enterprising  population. 

Any  nation  that  can  absorb  into  its  coinage,  at  a 
fixed  ratio,  all  the  surplus  silver  or  gold  bullion 
produced,  can  maintain  the  free,  unlimited,  and  in- 
dependent coinage  of  both  metals  and  keep  them  at 
a  practical  parity  all  the  time. 

None  of  the  great  nations  of  Europe  are  com- 
parable in  greatness  to  the  United  States.  You  can 
spread  out  on  a  part  of  this  country  Great  Britain, 
France,  Germany,  Austria,  Italy,  Spain,  Greece,  Den- 
mark, and  Switzerland  and  have  two-thirds  of  our 
territory  left.  If  our  entire  seventy-three  million 
people  were  located  in  the  great  State  of  Texas,  the 
population  per  acre  would  not  be  so  great  as  that  of 
Germany.  Our  soil  and  climate  are  such  that  we 
can  produce  every  article  necessary  to  man.  The 
productive  energy  of  the  United  States  is  greater  than 
that  of  England,  Germany,  and  France  combined. 

Gold  and  silver  are  not  found  in  unlimited  quan- 


96  MONEY   AND   PROSPERITY 

titles.  They  cannot  be  produced  like  iron  and  lead. 
All  gold-  and  silver-mining  districts  are  soon  ex- 
hausted, like  those  of  Ophir,  Spain,  and  the  placer 
mines  of  California,  and  new  ones  have  to  be  dis- 
covered, with  much  loss  of  time,  labor,  and  capital. 

The  probabilities  now  are  that  for  the  next  few 
years  much  more  gold  than  silver  will  be  mined  in 
this  country,  as  well  as  in  other  parts  of  the  world. 
The  world's  production  of  gold  between   1801   and 

1840  inclusive  was  only  ;$423, 535,000.  The  world's 
production  of  silver  during  that  period  was  ;^  1,062,- 
837,000.      The  world's   production   of   gold  between 

1841  and  1873  inclusive  was  ;^ 3, 05 8,069,000,  while  the 
world's  production  of  silver  during  that  time  was  only 
;^ 1, 448, 5 45, 000.*  Yet,  with  this  wide  fluctuation  in 
the  production  of  the  precious  metals,  the  commer- 
cial parity  of  the  two  metals  was  maintained  during 
that  entire  time. 

For  many  years  France  maintained  for  all  Europe 
the  virtual  commercial  parity  of  gold  and  silver  at  the 
ratio  of  fifteen  and  a  half  to  one.  The  ratio  of  the 
United  States  being  sixteen  to  one,  the  world's  price 
for  silver  was  naturally  fixed  in  France,  where  the 
highest  market  prevailed. 

*  Treasury  Department,  Bureau  of  the  Mint. 


INDEPENDENT   ACTION  97 

When  our  constitutional  bimetallic  system,  the  free, 
unlimited,  and  independent  coinage  of  both  gold  and 
silver  at  the  legal  ratio  of  sixteen  to  one,  is  again 
established,  the  price  of  silver  bullion  will  be  fixed  by 
the  United  States  government,  and  no  holder  of  silver 
bullion  in  any  country  will  sell  it  for  less  than  that 
fixed  price,  less  insurance  and  transportation  charges. 
Gold  would  not  then  have  the  monopoly  it  now 
enjoys,  and  it  would  not  be  so  difficult  to  obtain. 
The  gold  dollar  would  decline  in  value  and  the  silver 
dollar  would  rise  in  value. 

The  time  is  past  for  deceiving  the  people  with 
promises  of  international  bimetallism.  They  demand 
action  that  will  put  into  circulation  a  greater  volume 
of  full  redemption  money.  The  question  to  be  settled 
is,  how  shall  it  be  done  ?  The  money-power  interests 
would  prefer  to  contract  the  annual  supply  rather  than 
to  increase  it.  The  bankers  are  urging  the  government 
to  permit  bank  issues  of  paper  money,  which  would 
be  merely  credit  money,  subject  to  inflation  or  con- 
traction at  the  will  of  the  bankers.  The  paper  and  ink 
necessary  to  print  several  hundred  thousand  dollars' 
worth  of  bank-notes  would  cost  only  a  few  cents. 
How  can  such  money  be  more  desirable  or  valuable 
than  silver  coin  or  silver  certificates,  redeemable  in 
silver  coin  ?     If  the  bank  issues  of  paper  money  are  to 

7 


98  MONEY   AND   PROSPERITY 

be  made  "good"  and  "sound"  by  the  stamp  of  the 
government,  why  is  it  that  silver  cannot  be  made  good 
money  in  Hke  manner?  It  must  be  remembered  that 
bank  issues  of  paper  money  would  not  in  any  way  in- 
crease the  supply  of  full  redemption  money,  money  of 
final  payment,  which,  according  to  Mr.  Fairchild,  ex- 
Secretary  Carlisle,  and  other  gold  standard  authorities, 
is  gold  money.  These  authorities  claim  that  all  our 
present  paper  money  and  the  silver  dollars  as  well  are 
redeemable  in  gold ;  if  this  is  so,  then  there  are  now,  ac- 
cording to  the  report  of  the  Secretary  of  the  Treasury, 
about  one  billion  dollars  of  such  money  redeemable 
in  gold,  a  sum  equal  to  nearly  twice  the  amount  of 
gold  in  the  whole  country.  If  bank  issues  of  paper 
money  are  permitted  instead  of  opening  our  mints  to 
the  free  coinage  of  silver,  panics  will  ensue,  and  the 
government  will  be  obliged  to  continue  the  borrowing 
process  in  order  to  maintain  the  gold  reserve  in  the 
Treasury. 

Bimetallists  have  long  since  ceased  to  hope  for 
international  bimetallism.  They  know  that  our  gov- 
ernment is  already  under  the  control  of  Lombard 
Street  and  Wall  Street,  and  therefore  they  do  not 
favor  committing  the  country  more  thoroughly  into 
the  hands  of  the  money-changers  by  allow'ing  the 
bankers  to  control  our  annual  money  supply. 


INDEPENDENT  ACTION  99 

It  is  said  if  we  adopt  the  free  coinage  of  silver  our 
foreign  credit  would  be  affected.  We  pay  as  interest 
to  foreign  nations  nearly  two  hundred  million  dollars 
annually,  and  when  our  mints  are  again  opened  to 
the  free  and  unlimited  coinage  of  silver,  the  creditor 
nations  of  Europe  will  by  self-interest  be  coerced  into 
aiding  us  to  maintain  the  double  standard.  When 
the  holders  of  gold  money  learn  that  the  double 
standard  is  again  to  be  adopted,  that  gold,  in  conse- 
quence, will  fall  in  value,  and  that  the  value  of  all 
property  will  rise,  they  will  hasten  to  exchange  their 
gold  for  goods  and  property. 

The  monetary  commission  which  assembled  in  In- 
dianapolis formulated  plans  to  more  securely  estab- 
lish the  gold  standard  in  the  United  States.  These 
plans  proposed  that  bank-notes  should  supersede 
greenbacks  and  silver  certificates ;  that  no  more  sil- 
ver dollars  should  be  coined,  and  that  all  standard 
silver  dollars  should  be  redeemed  in  gold.  They 
advised  that  silver  dollars  should  be  melted  down 
and  sold  as  bullion,  and  also  that  all  silver  bullion 
on  hand  should  be  disposed  of 

Secretary  Gage,  in  his  plan  advocating  the  retire- 
ment of  the  government  paper  money,  admits  that  the 
contraction  of  the  currency  would  probably  be  more 
pernicious  in  two  or  three  years  than  the  interest  on 


loo  MONEY   AND   PROSPERITY 

an  equal  amount  of  bonds  would  be  for  forty  years. 
But  he  thinks  the  national  banks  would  issue  enough 
money  to  prevent  much  contraction.  The  people 
would  have  to  depend  upon  the  honor  of  the  national 
banks.  In  giving  this  great  power  to  the  banks,  the 
government  is  not  to  require  them  to  redeem  their 
notes  in  gold ;  but  the  United  States  government  is 
to  do  so  on  demand,  and  the  national  banks  can  settle 
with  the  government  in  "  any  kind  of  legal  tender 
money  at  the  option  of  the  banks."  It  was  said  in 
1893  that  the  panic  was  produced  by  the  fear  that  the 
government  could  not  maintain  gold  payments  if  the 
Sherman  law  remained  longer  in  force.  If  all  this 
several  hundred  millions  of  money  to  be  issued  by 
the  national  banks  is  to  be  redeemable  by  the  United 
States  government  in  gold  in  order  to  make  it  "good" 
and  "  sound"  money,  by  what  force  of  reasoning  does 
any  one  conclude  that  the  government  is  now  capable 
of  redeeming  such  bank  issues  of  paper  money  in 
gold  and  could  not,  in  1893,  keep  in  circulation  fifty- 
four  million  dollars  of  silver  annually  ? 

We  have  heard  much  about  the  sugar  trust,  the 
oil  trust,  and  numerous  other  big  trusts  ;  but  should 
the  banks  secure  any  greater  control  of  the  money 
supply  of  this  nation,  all  of  these  trusts  put  into  one 
gigantic  whole  would  not  compare  with  such  a  bank 


INDEPENDENT   ACTION  loi 

trust  in  the  disastrous  effects  it  would  have  upon  the 
people. 

In  1893,  when  the  bill  to  repeal  the  Sherman  law 
was  being  discussed  in  the  United  States  Senate, 
Senator  John  P.  Jones,  of  Nevada,  called  attention  to 
the  fact  that  bankers  and  the  moneyed  interests,  after 
entirely  stopping  the  coinage  of  silver,  would  insist 
that  the  government  should  cease  to  issue  paper 
money  and  turn  over  the  prerogative  to  the  banks. 
He  said,  "  The  repeal  of  the  Sherman  law,  if  accom- 
plished, will  be  but  one-half  of  the  scheme  of  the 
banks.  They  desire  to  get  silver  first  out  of  the  way. 
The  project  is,  and  the  determination  of  the  banks  is, 
that  they  niust  be  permitted  to  have  a  monopoly  of 
the  issue  of  money.  They  insist  that  the  government 
shall  cease  the  issuance  of  money  and  hand  over  the 
prerogative  to  them.  By  the  Constitution  the  right 
to  coin  money  was  given  to  Congress.  The  bankers 
do  not  believe  that  was  a  wise  provision  on  the  part 
of  the  framers  of  the  Constitution,  who  should  have 
devolved  this  duty  upon  the  banks. 

"When  silver  is  out  of  the  way,  they  will  acquiesce 
in  the  views  of  the  producers  of  the  country  that 
more  money  is  necessary,  and  will  demand  an  issue 
of  several  hundred  million  dollars  of  bonds  in  order 
that  the  country  may  be  enabled  to  have  a  sufficient 


I02  MONEY   AND   PROSPERITY 

volume  of  money  to  do  its  business  and  maintain 
some  degree  of  prosperity.  They  hope  and  expect 
that  by  the  time  they  are  ready  to  push  this  demand 
the  distress  of  the  country  will  be  so  great  for  the 
want  of  money  that  their  wishes  will  be  complied 
with. 

"  There  is  no  doubt  that  the  distress  of  the  country 
will  be  great  for  the  want  of  money.  Distress  will 
continue  until  relief  is  obtained  by  a  sufficient  supply 
of  money,  not,  however,  bank  money,  but  full  legal 
tender  money.  It  is  useless  to  hope  for  permanent 
improvement  of  industrial  conditions — useless  to  ex- 
pect that  the  great  masses  of  idle  men  will  find  per- 
manent employment — until  a  volume  of  money  shall 
be  issued  sufficient  to  arrest  the  pernicious  fall  of 
prices,  and  give  to  employers  of  labor  and  projectors 
of  great  enterprises  the  reasonable  assurance  that  by 
employing  workmen  they  will  not  be  losing  money. 
This  new  money  cannot  be  gold.  We  already  have 
our  distributive  share  of  the  gold  of  the  world,  and  if 
we  temporarily  get  more  we  cannot  keep  it.  Silver 
must  therefore  be  remonetized,  unless  we  are  to  resort 
altogether  to  paper  money.  The  country  must  have 
money,  and  there  appears  to  be  no  alternative  for 
quartz-mills  except  paper-mills.  This  may  be  an 
unwelcome  dilemma  to  the  national  banks  and  the 


INDEPENDENT   ACTION  103 

creditor  classes  in  general,  but  if  industry  is  to  be  re- 
vived and  maintained  in  this  country  it  is  a  dilemma 
of  which  those  classes  must  accept  either  the  one 
horn  or  the  other. 

"  If  the  government  must  issue  bonds, — for  which, 
in  my  opinion,  there  is  no  necessity, — why  should  it 
not  take  the  bonds  into  its  own  possession  and  deposit 
them  in  the  Treasury  of  the  United  States  as  security 
for  Treasury  notes  to  be  issued  by  the  government 
without  expense  to  the  people  ?  In  that  case  the 
government  would  have  the  advantage  of  saving  the 
interest  on  the  bonds  while  they  were  locked  u[)  in 
the  Treasury,  which  could  not  be  saved  if  the  bonds 
were  placed  there  as  the  property  of  the  banks. 

"  We  do  not  need  to  issue  bonds  for  gold.  We  do 
not  need  to  sacrifice  our  people  for  gold.  This  country 
does  not  need  to  depend  upon  any  other  country  for 
money.  By  reliance  upon  ourselves,  our  own  re- 
sources, and  our  own  people,  any  development  that  is 
necessary  in  our  country  will  be  made  without  diffi- 
culty. We  do  not  need  to  borrow  from  other 
countries  for  the  purpose. 

"  For,  after  all,  what  is  it  that  is  necessary  for  de- 
velopment? Nothing  but  labor  and  the  products  of 
labor.  We  have  enough  men  and  enough  material 
for  all  rational  and  natural  development.     All  that  is 


104  MONEY   AND    PROSPERITY 

necessary  in  addition  is  to  have  a  well-regulated  sys- 
tem of  money  of  our  own." 

Gold  monometallists  contend  that  we  want  "  money 
good  in  any  part  of  the  world."  There  is  no  such 
thing  as  international  money.  The  fact  that  leading 
commercial  nations  admit  gold  to  the  mints  in  un- 
limited quantities  does  not  prove  that  gold  is  prefer- 
able to  silver  as  a  circulating  medium.  The  demand 
for  gold  is  so  great  that  it  is  constantly  moving  from 
one  country  to  another,  upsetting  prices,  while  silver, 
the  money  of  the  people,  remains  at  home.  The 
gold  coin  and  the  silver  coin  of  the  United  States 
is  not  money  outside  of  the  jurisdiction  of  this 
country ;  they  are  as  much  a  commodity  as  cotton 
and  wheat. 

There  are  a  few  people  who  favor  the  free  coinage 
of  silver  by  changing  the  ratio  from  sixteen  to  one 
to  twenty  to  one  or  thirty-two  to  one.  To  thus 
change  the  present  legal  ratio  of  sixteen  to  one  would 
interfere  with  existing  contracts  and  would  unjustly 
decrease  our  small  volume  of  metallic  money.  The 
ratio  of  the  leading  nations  of  the  world,  except  the 
United  States,  is  fifteen  and  one-half  to  one,  and  the 
proportion  of  silver  to  gold  in  the  world  is  about 
sixteen  to  one.  Sixteen  to  one  was  the  legal  ratio 
from    1834  to    1873,  and   it  is   the   ratio   which   now 


INDEPENDKN'l"   AC'l'ION  105 

exists  between  the  gold  and  the  silver  coins  in  circu- 
lation in  this  country.  Should  all  nations  establish 
a  ratio  of  thirty-two  to  one  it  would  be  necessary  to 
to  recoin  four  billion  dollars  of  silver  coin,  and  the 
metallic  money  of  the  world  would  be  reduced  one- 
fourth. 

The  remedy  for  the  gold  standard  is  the  free  and 
unlimited  coinage  of  both  gold  and  silver  at  the 
present  legal  ratio  of  sixteen  to  one  by  the  inde- 
pendent action  of  the  United  States. 

In  an  article  to  the  New  YovV:  Journal,  February  6, 
1898,  William  J.  Bryan  points  out  the  remedy  as  fol- 
lows:  "In  1896  independent  bimetallism  was  pointed 
out  as  the  only  remedy  for  the  gold  standard,  and  the 
failure  of  our  Monetary  Commission  to  secure  inter- 
national bimetallism  strengthens  our  contention.  The 
Senate  has  recently  put  itself  upon  record  in  favor  of 
that  plank  of  our  platform  which  declares  that  the 
silver  dollar  shall  have  a  debt-paying  power  equal  to 
the  gold  dollar,  and  that  the  government  shall  not 
surrender  its  right  to  redeem  coin  obligations  in  either 
gold  or  silver,  and  the  House  has  declared  against 
the  proposition.  The  effort  of  the  Secretary  of  the 
Treasury  to  secure  authority  to  issue  more  bonds  and 
his  demand  for  the  retirement  of  greenbacks  are  in 
direct  opposition  to  the  position  above  stated.     Thus 


io6  MONEY   AND   PROSPERITY 

it  will  be  seen  that  events,  not  free  silver  agitators,  are 
keeping  the  money  question  before  the  country. 

"  The  evil  effects  of  the  gold  standard  are  so  ap- 
parent that  the  Republican  party  refuses  to  become 
sponsor  for  the  system  ;  it  is  so  indefensible  that  even 
Secretary  Gage,  in  his  recent  speech  at  Philadelphia, 
took  occasion  to  say  that  the  President  is  in  favor  of 
international  bimetallism,  and  has  the  support  of  all 
his  cabinet  in  his  effort  to  secure  the  co-operation  of 
other  nations  in  getting  rid  of  the  gold  standard, 

"  But  while  the  Republican  party,  through  the  chief 
executive,  still  holds  out  the  hope  of  international 
bimetallism,  none  of  the  party  leaders  say  a  word  in 
defence  of  the  double  standard,  independent  or  inter- 
national. Why  not  ?  Because  international  bimetal- 
lism can  only  be  defended  on  the  theory  that  the 
existing  gold  standard  is  unsatisfactory,  and  the  Re- 
publican leaders  know  that  the  Republican  party  has 
no  real  intention  of  abandoning  the  present  gold  stand- 
ard, and  they  cannot,  therefore,  afford  to  say  anything 
which  would  make  the  people  dissatisfied  with  it. 
Neither  do  they,  as  a  rule,  say  anything  in  favor  of 
the  gold  standard,  because  to  do  so  would  at  once 
raise  the  question.  Why,  then,  is  international  bi- 
metallism desirable?  Occasionally  a  speaker  will  be 
found  who  will  take  both  sides  of  the  question,  as  did 


INDEPENDENT   ACTION  107 

Mr.  Gage  at  Philadelphia.  After  trying  to  show  that 
the  gold  standard  had  been  a  great  blessing  to  the 
laboring  man,  he  declared  it  to  be  the  intention  of  the 
Republicans  to  substitute  another  system.  The  ques- 
tion at  once  arises,  If  the  gold  standard  has  been  a 
blessing  to  the  laboring  man,  why  does  not  the  Re- 
publican party  advocate  its  retention  rather  than  its 
abandonment  ?  International  bimetallism  will  have 
exactly  the  same  effect  as  independent  bimetallism  in 
raising  prices.  If  a  fall  in  prices  is  an  advantage,  then 
a  rise  in  prices  cannot  be  desirable;  and  if,  on  the 
other  hand,  a  rise  in  prices,  whether  obtained  through 
independent  bimetallism  or  through  an  international 
agreement,  is  good,  then  the  fall  in  prices  caused  by 
the  gold  standard  must  be  admitted  to  have  worked 
an  injury.  The  fall  in  prices,  extending  over  the  last 
twenty-five  years,  has,  in  fact,  been  disastrous  to  the 
producers  of  wealth  in  every  gold  standard  country 
in  the  world.  .  .  . 

"The  stand  taken  by  the  Republicans  raises  the 
most  important  question  that  can  confront  a  nation, 
namely,  the  right  of  the  people  to  legislate  for  them- 
selves. The  Republican  platform  is  the  first  platform 
which  ever  declared  in  favor  of  repealing  the  Decla- 
ration of  Independence.  That  platform  expressly 
transfers  from  America  to   Europe  the  right  to   de- 


loS  MONEY   AND   PROSPERITY 

termine  the  financial  policy  of  the  United  States. 
According  to  that  platform,  the  American  people 
should  seek  international  co-operation  in  restoring 
bimetallism,  but  must  maintain  the  gold  standard  until 
that  co-operation  is  secured.  The  Republican  plan 
is  to  invite  foreign  assistance,  but  while  we  may  in- 
vite, European  nations  are  at  liberty  to  refuse  the  invi- 
tation, and  they  have  thus  far  done  so.  The  Repub- 
lican platform,  therefore,  means  that  we  must  have  the 
gold  standard  as  long  as  European  nations  favor  the 
gold  standard,  and  can  have  bimetallism  only  when 
they  consent  to  it. 

"  Recent  events  have  demonstrated  that  Europe  has 
turned  the  money  question  over  to  England,  and 
England  seems  to  have  turned  it  over  to  the  English 
financiers,  who,  on  the  22d  of  last  September,  met  at 
the  Clearing  House,  pledged  themselves  to  secrecy, 
decided  upon  the  gold  standard,  and  thus  determined 
our  financial  policy  as  long  as  the  Republican  plan 
prevails. 

"  No  one  believes  that  bimetallism  will  prove  a 
panacea  for  all  political  ills,  but  the  money  question 
must  be  settled  before  other  questions  can  be  reached. 
Financial  independence  is  a  condition  precedent  to 
reform  along  other  lines.  The  power  that  controls 
our  financial  policy  can  control  the  policy  of  our  gov- 


INDEPENDENT   ACTION  109 

eniment  on  every  other  subject  whenever  occasion 
arises  for  the  exercise  of  that  control.  Suppose,  for 
instance,  that  the  money  question  were  dropped  and 
the  fight  against  the  trusts  made  the  main  issue. 
Mucli  foreign  capital  is  invested  in  trusts,  and  foreign 
financiers  could  announce  that  any  legislation  hostile 
to  trusts  would  be  followed  by  the  withdrawal  of 
foreign  capital  and  a  panic.  If  they  can  threaten  the 
withdrawal  of  foreign  capital  to  prevent  a  change  of 
our  financial  policy,  they  can  threaten  such  withdrawal 
to  prevent  the  annihilation  of  trusts  or  the  regulation 
of  other  corporations.  Not  only  can  this  threat  be 
made  in  regard  to  our  domestic  policy,  but  it  can  be 
made  to  prevent  the  adoption  of  any  foreign  policy 
which  does  not  meet  with  favor  in  Europe.  We  can- 
not protect  the  rights  of  our  citizens,  avenge  an  insult 
to  the  flag,  enforce  the  Monroe  doctrine,  or  express 
our  sympathy  with  those  who  are  struggling  to  be 
free,  if  we  are  to  be  deterred  by  the  threats  of  foreign 
investors.  The  right  to  legislate  for  our  people  on 
the  money  question  involves  the  right  to  legislate  on 
all  questions,  and  until  this  right  is  secured  the  dis- 
cussion of  other  questions  will  avail  nothing.  When 
we  have  released  ourselves  from  the  dictation  of 
foreign  financiers  and  overthrown  the  local  money 
trust  which  cc^ntrols  our   financial    policy,  we  shall  be 


no  MONEY   AND   PROSPERITY 

in  a  position  to  undertake  the  extermination  of  other 
trusts  and  the  protection  of  our  people  from  all  forms 
of  monopolistic  oppression.  .  .  . 

"  Bimetallists  contend  that  gold  and  silver  have 
been  driven  apart  by  hostile  legislation,  and  that 
they  can  be  brought  together  by  friendly  legislation. 
They  contend  that  legislation  favorable  to  gold  has 
increased  the  purchasing  power  of  an  ounce  of  gold 
throughout  the  world  and  lowered  the  general  level 
of  prices,  while  the  same  legislation  has  lessened  the 
demand  for  silver  and  lowered  the  gold  price  of  that 
metal.  They  contend  that  the  restoration  of  the  free 
and  unlimited  coinage  by  a  great  nation  like  the 
United  States  will  increase  the  demand  for  silver  to 
a  point  where  the  mints  will  require  all  the  surplus 
silver  of  the  world,  and  thus,  by  raising  the  gold 
price  of  silver  and  lowering  the  purchasing  power 
of  an  ounce  of  gold,  will  restore  the  parity  at  sixteen 
to  one,  and  thereafter  maintain  the  parity  at  that 
ratio." 

"  I  know  no  way  of  judging  the  future,"  said 
Patrick  Henry,  "but  by  the  past."  Our  first  coinage 
law  was  passed  in  1792,  and  bimetallism  was  a  success 
from  that  time  until  silver  was  demonetized  in  1873. 
We  also  know  that  the  gold  standard  is  a  failure. 
As  the  future  can  only  be  judged  by  the  past,  we 


INDEPENDENT   ACTION  in 

must  insist  that  our  people  would  be  better  served 
by  the  readoption  of  our  constitutional  bimetallic 
system,  the  free,  unlimited,  and  independent  coinage 
of  both  gold  and  silver  at  the  ratio  of  sixteen  to  one, 
without  further  solicitation  of  foreign  support. 

The  opponents  of  bimetallism  contend  that  if  the 
free  and  unlimited  coinage  of  silver  is  again  adopted 
we  would  be  deluged  with  the  silver  of  the  world. 
An  important  point  in  this  contention  is  always  lack- 
ing; they  fail  to  show  where  this  great  flood  of  silver 
is  coming  from.  It  is  reported  by  the  director  of  the 
United  States  Mint  that  there  is  about  four  billion  dol- 
lars of  gold  in  the  world  and  about  the  same  amount 
of  silver  money.  About  three  billion  four  hundred 
million  dollars  of  this  silver  is  full  legal  tender. 
How  absurd  it  is  to  say  that  other  nations  would 
send  their  full  legal  tender  money  to  the  United 
States,  when  it  is  performing  all  the  functions  of  gold 
in  the  payments  for  commodities,  property,  and  debts 
in  the  countries  where  it  is  coined !  The  limited  legal 
tender  contains  from  five  to  ten  cents  less  silver  to  the 
dollar  than  our  dollar,  and  who  can  be  insane  enough 
to  believe  that  "private  individuals"  will  go  to  the 
expense  of  gathering  up  this  silver,  pay  express 
charges  and  insurance,  and  ship  it  to  this  country? 
Many  people  believe  the  Treasury  vaults  at  Washing- 


112  MONEY   AND    PROSPERITY 

ton  are  "  groaning"  with  silver  bullion,  and  that 
various  nations  have  enormous  amounts  of  silver 
bullion  stored  away ;  while  the  fact  is,  there  is  not 
twenty-five  million  ounces  of  silver  bullion  anywhere 
in  the  world  for  sale  to-day. 

We  are  told  that  the  silver  in  the  arts  would  be 
melted  down  and  sent  to  our  mints  to  be  coined  into 
money.  This  claim  virtually  admits  that  there  would 
be  a  large  increase  in  the  value  of  silver.  When  the 
cost  of  the  manufacture  of  silver  and  the  demand  for 
it  in  the  arts  is  considered,  it  is  folly  to  talk  of  much 
silver  bullion  coming  from  this  source;  on  the  other 
hand,  there  will  continue  to  be  each  year  a  constant 
demand  for  more  silver  in  the  arts.  It  has  been  said 
that  the  silver  in  India  would  be  gathered  up  and 
"  dumped"  into  this  country.  Whatever  monetary 
standard  Great  Britain  may  force  upon  India,  silver 
will  continue  to  be  in  that  country  the  principal 
redemption  money,  and  will  constantly  be  in  demand 
in  large  quantities  by  the  government  and  people. 
It  is  true  that  India  has  for  centuries  drawn  from  all 
parts  of  the  world  large  quantities  of  silver  which 
was  coined  into  rupees  and  used  in  the  architectural 
decorations  of  numerous  beautiful  temples.  Millions 
of  the  inhabitants  of  India  invest  their  savings  in 
silver,  which    thev   have    made    into    ornaments    and 


INDEPENDENT   ACTION  ii 


o 


sacred  charms  that  are  never  disposed  of  except  in 
extreme  cases.  Lord  Herschel's  Indian  commission 
reported  that  during  the  great  famine  in  1877-79, 
when  more  than  five  hundred  thousand  deaths  by 
starvation  were  recorded,  only  about  twenty-two  mil- 
lion dollars'  worth  of  silver  ornaments  and  charms 
found  their  way  to  the  mints  during  the  three  years' 
famine. 

When  bimetallists  refute  all  of  these  arguments  by 
incontestable  facts,  they  are  met  by  the  assertion  that 
the  over-production  from  the  mines  would  deluge  us 
with  silver  until  we  would  be  forced  to  a  silver  basis. 
This  is  another  admission  that  silver  bullion  would 
rise  in  value,  otherwise  there  would  be  no  inducement 
for  extra  exertion  in  producing  the  metal.  The 
world's  mint  records  from  1473  to  1873  show  great 
fluctuations  in  the  production  of  gold  and  silver, — 
greater  than  since  silver  was  demonetized, — and  yet 
practically  a  steady  ratio  was  maintained  between  the 
two  metals  for  that  entire  time. 

When  several  of  the  leading  nations  in  1873-74 
demonetized  silver,  its  commercial  value  as  measured 
in  gold  was  depreciated,  and  it  has  continued  to  fall  in 
value  ever  since.  Silver  cannot  rise  in  value  until 
some  great  nation  gives  the  metal  free  coinage.  Ac- 
cording to  the  mint  reports,  the  world's  production  of 

8 


114  MONEY   AND   PROSPERITY 

silver,  from  1873  to  1892  inclusive  was  ^2,246,519,000, 
and  that  of  gold  for  the  same  period,  ^2,157,097,000. 
The  average  production  of  silver  over  that  of  gold  for 
this  period  was,  therefore,  less  than  five  million  dollars 
a  year,  an  amount  equal  to  only  one-tenth  the  number 
of  standard  silver  dollars  put  into  circulation  by  the 
law  of  1890.  It  is  estimated  that  at  least  one-fourth 
of  the  world's  production  of  silver  is  used  in  the  arts, 
and  many  place  the  estimate  at  one-half. 

The  Sherman  law  was  enacted  in  1890,  and  repealed 
in  1893;  during  that  time  there  was  purchased 
annually  fifty-four  million  dollars'  worth  of  silver,  yet 
the  amount  was  not  large  enough  to  even  prevent  the 
fall  of  general  prices,  much  less  to  increase  them. 
Since  the  beginning  of  history  no  nation  has  ever 
been  deluged  with  more  silver  than  the  people  needed 
for  use  as  money  and  in  the  arts.  Silver  never  has 
been  and  never  will  be  produced  in  unlimited  quantities. 

By  the  law  of  1890  the  government  is  required  to 
maintain  the  parity  of  gold  and  silver.  In  order  to  do 
this  the  Secretary  of  the  Treasury  paid  out  gold  in- 
stead of  silver.  He  permitted  the  creditor  to  name 
the  kind  of  money  wanted  instead  of  reserving  the 
legal  right  to  pay  in  gold  or  silver,  but  this  did  not 
maintain  the  commercial  parity  of  the  two  metals. 

The   value   of  the    bullion   in   the  silver   dollar   in 


INDEPENDENT   ACTION  115 

1891  was  about  sixty-five  cents;  in  1895  it  was  down 
to  about  fifty-two  cents.  That  part  of  the  law  of  1 890 
requiring  the  maintenance  of  the  parity  of  the  two 
metals  reads  as  follows :  "  It  being  the  established 
policy  of  the  United  States  to  maintain  the  two  metals 
on  a  parity  with  each  other  upon  the  present  legal 
ratio."  The  parity  cannot  be  maintained  by  discrim- 
inating against  silver  in  favor  of  gold.  The  free  and 
unlimited  coinage  of  both  gold  and  silver  at  a  fixed 
ratio  creates  an  unlimited  demand  for  the  metals  at  a 
fixed  price.  When  silver  was  denied  free  and  un- 
limited coinage  at  the  mints  its  commercial  value  was 
lowered,  because  its  principal  value,  like  that  of  gold, 
is  almost  entirely  due  to  its  use  as  money.  If  all  the 
nations  of  the  world  were  to  discontinue  the  use  of 
silver  as  money,  its  commercial  value  would  probably 
fall  to  a  few  cents  an  ounce,  as  measured  in  gold. 

The  class  of  men  who  want  to  fasten  the  gold 
standard  on  this  country  are  the  money-changers, — 
the  Rothschilds,  the  Morgans,  and  those  whom  they 
can  coerce  or  control  by  money,  influence,  and  false 
representation.  The  conspiracy  to  demonetize  silver 
was  hatched  in  London,  and  the  British  have  had  a 
hand  in  every  move  since  which  has  had  for  its  object 
the  forcing  of  this  government  to  a  permanent  gold 
standard  basis. 


ii6  MONEY   AND    PROSPERITY 

No  argument,  based  on  facts,  has  been  advanced 
which  proves  that  the  free  and  unHmited  coinage  of 
silver  by  the  United  States  alone  would  not  be  suc- 
cessful. All  arguments  against  bimetallism  are  based 
on  fear,  apprehension,  and  prediction.  On  the  other 
hand,  we  know  that  the  single  gold  standard  is  a  fail- 
ure, and  that  the  advocates  of  the  restoration  of  the 
standard  silver  dollar  can  cite  indisputable  facts  in 
support  of  their  contention. 

In  1878  the  bimetallists  gave  due  warning  as  to 
what  the  result  of  the  demonetization  of  silver  would 
be.  They  showed  that  as  the  country  reached  a  more 
thoroughly  gold  basis  an  insufficient  money  supply 
would  produce  falls  in  general  prices,  causing  thou- 
sands of  business  failures,  great  reduction  in  the  em- 
ployment of  labor,  and  financial  panics.  It  is  folly  to 
expect  silver,  degraded  as  it  is,  to  rise  in  commercial 
value  until  at  least  one  of  the  great  nations  again  gives 
it  free  and  unlimited  coinage,  and  thus  creates  an  un- 
limited demand  for  the  metal.  Whence  cometh  the 
cry,  so  often  heard,  of  fifty-cent  dollars  ?  It  is  not 
from  the  farmer  or  the  laborer,  or  the  debtor  class. 
These  constitute  the  great  majority  of  our  seventy- 
three  million  population.  For  the  sake  of  argument, 
let  us  suppose,  after  the  United  States  shall  have  re- 
stored silver  to  its  constitutional  legal  ratio  of  sixteen 


INDEPENDENT   ACTION  117 

to  one,  that  its  commercial  value,  as  measured  in  gold, 
does  not  rise  above  its  present  price ;  with  our  mints 
opened  to  the  free  and  unlimited  coinage  of  silver,  and 
each  dollar  coined  made  a  full  legal  tender  for  all  debts, 
both  public  and  private,  every  standard  silver  dollar  in 
this  country  would  pay  as  much  of  debts  and  taxes 
as  any  gold  dollar  would.  Then  what  becomes  of 
the  fifty-cent  dollar  idea  ?  Ah,  we  are  told  our 
trouble  would  arise  in  the  settlement  of  international 
balances !  Only  about  five  per  cent,  of  our  people 
have  international  balances  to  settle,  and  these  are 
principally  importers.  In  international  trade  com- 
modities are  exchanged  for  commodities  and  settle- 
ment is  made  by  bills  of  exchange.  Gold  and  silver 
are  used  only  to  settle  final  balances,  and  they  are 
not  considered  as  money,  but  as  bullion.  The  sub- 
sidized press  and  the  advocates  of  gold  monometal- 
lism try  to  frighten  the  toiling  classes  who  have 
deposits  in  the  savings-banks,  by  telling  them  that 
the  free  coinage  of  silver  means  the  cutting  down  of 
one-half  their  deposits.  These  monometallists  would 
better  employ  their  time  in  trying  to  explain  why, 
under  the  present  monetary  system,  so  many  of  the 
laboring  men,  for  whom  they  profess  so  much  sym- 
pathy, are  hungry  and  out  of  employment;  and  why 
so  much  of  this  money  is  drawn  from  the  savings- 


ii8  MONEY  AND   PROSPERITY 

banks  each  year  to  be  given  to  labor  unions  to  sup- 
port the  families  of  laborers  out  on  strike  for  living 
wages. 

When  money  is  rising  in  value  it  is  withdrawn 
from  productive  and  industrial  enterprises,  producing 
hard  times.  More  laborers  are  thrown  out  of  steady 
employment  and  the  number  of  those  retaining  their 
places  is  not  increased,  as  would  be  the  case  if  money 
were  falling,  or  stable  in  value,  but  instead  many  are 
reduced  to  half-time  or  a  diminution  of  their  pay. 
When  laborers  cannot  find  employment  wages  de- 
crease, owing  to  the  supply  being  greater  than  the 
demand.  Thus  the  laborer  who  has  money  on  de- 
posit in  the  savings-bank,  sooner  or  later  is  obliged  to 
withdraw  his  hard-earned  savings  to  meet  pressing 
demands.  While,  on  the  other  hand,  our  people  could 
enjoy  continuous  prosperity  if  an  ample  supply  of 
full  redemption  money  were  put  into  circulation. 
This  would  stop  hoarding  and  the  accumulation  of 
unemployed  capital  in  the  banks,  relieve  productive 
and  business  stagnation,  and  insure  constant  and  re- 
munerative employment  to  the  laborer. 

The  advocates  of  the  gold  standard  tell  us  that  if 
you  give  free  and  unlimited  coinage  to  the  standard 
silver  dollar,  all  our  gold  would  be  driven  out  of  the 
country,     Bimetallists   contend  that  our   gold  would 


INDEPENDENT   ACTION  119 

not  leave  us  to  any  great  extent,  because  the  free  and 
unlimited  coinage  of  silver  would  increase  the  value 
of  silver  and  reduce  the  value  of  gold;  and  even  if 
some  of  the  gold  should  at  first  go  out  of  the  country, 
or  be  hoarded,  it  would  only  be  for  a  short  time,  for 
with  silver  remonetized  new  energy  would  be  infused 
into  every  class  of  business  and  an  era  of  rising  prices 
would  set  in,  and  gold  and  every  other  kind  of  money 
would  be  in  great  demand  and  freely  offered.  The 
holders  of  gold  would  know  that  no  further  unearned 
increment  of  money  would  be  possible,  and  hoarding 
would  cease.  But  suppose  that  gold  should  leave  us 
and  go  to  Europe.  According  to  the  report  of  the 
Treasury  Department,  Europe  has  about  three  billion 
dollars  of  gold.  Our  six  hundred  million  dollars 
would,  therefore,  increase  their  stock  twenty  per  cent., 
and  the  value  of  gold  there  would  fall.  This  would  be 
indicated  by  a  rise  in  general  prices.  As  prices  rise 
there,  they  would  have  to  bring  back  the  gold  here  to 
purchase  our  products  of  cotton,  wheat,  meat,  pe- 
troleum, iron,  and  many  of  our  other  home  products. 
This  money  would  of  necessity  be  mostly  if  not  en- 
tirely gold  that  would  be  sent  back  to  purchase  our 
products,  for  there  is  no  available  silver  bullion,  or 
silver  coin  that  could  be  turned  into  silver  bullion, 
anywhere  in  Europe.     When  we  consider  these  facts. 


I20  MONEY   AND   PROSPERITY 

and  that  the  United  States  produces  a  large  portion 
of  the  gold  of  the  world,  we  must  conclude  that  our 
gold  standard  friends  are  in  error  in  claiming  that  our 
gold  would,  to  any  extent,  leave  the  country  if  the 
United  States  should  open  the  mints  to  the  free  and 
unlimited  coinage  of  silver  at  the  legal  ratio  of  sixteen 
to  one. 

It  has  been  persistently  urged  by  the  bond-holding 
class  that  if  our  mints  were  opened  to  the  free  coinage 
of  silver,  the  silver  dollar  would  fall  in  value — fall  in 
purchasing  power — equal  to  that  of  Mexico.  There 
has  been  no  depreciation  in  the  value  of  the  Mexican 
silver  dollar.  It  will  purchase  as  much  in  that  coun- 
try now  as  it  would  in  1873.  The  population  of 
Mexico  is  less  than  one-sixth  that  of  the  United 
States,  with  a  foreign  trade  of  one-twentieth,  and  a 
domestic  trade  of  less  than  one-hundredth  part  that 
of  the  United  States,  and,  with  no  such  demand  for 
money  as  in  this  country,  Mexico  cannot  be  ex- 
pected to  materially  raise  the  gold  price  of  silver 
bullion. 

It  is  said  by  the  gold  standard  clique  that  silver 
has  been  abandoned  by  nearly  all  the  civilized  na- 
tions. The  masses  of  the  people  have  never  in  any 
country  evinced  a  desire  to  discard  silver.  Silver  has 
been  struck  down  by  the  plutocrats  in  Europe  and 


INDEPENDENT   ACTION  121 

the  money-changers  and  their  chosen  representatives 
in  this  country.  The  producing  classes  in  every 
country  in  the  world  to-day  demand  the  free  coinage 
of  silver.  In  England,  the  farmers,  mechanics,  and 
producers  of  wealth  generally  are  opposed  to  the 
gold  standard.  In  1895  the  German  Reichstag  de- 
clared for  international  bimetallism,  and  France  has 
for  years  desired  to  abandon  the  gold  standard  and  to 
open  her  mints  to  the  free,  and  unlimited  coinage  of 
silver  the  same  as  gold. 

We  have  had  enough  experiments  in  "  trying  to  do 
something  for  silver."  Limited  coinage  of  silver  since 
1873  succeeded  only  in  making  the  fall  in  the  price 
of  silver  buUion  more  gradual.  Neither  the  Bland- 
Allison  act  nor  the  Sherman  law  could  restore  the 
parity  of  the  metal,  although  in  1890,  when  there  was 
a  mere  prospect  that  our  mints  might  be  opened  to 
the  free  coinage  of  silver,  the  bullion  price  rose  to  one 
dollar  and  twenty  cents  an  ounce  not  only  in  the  United 
States,  but  in  every  country  in  the  world.  When  the 
United  States  was  purchasing  a  limited  amount  of  sil- 
ver, we  were  only  a  factor  in  fixing  the  price. 

So  long  as  the  demand  for  money  remains  the  same, 
if  our  gold  were  withdrawn  the  silver  dollars  in  taking 
the  place  of  the  gold  would  be  increased  in  value 
in  proportion  to  the  amount  of  gold  withdrawn,  less 


122  MONEY  AND   PROSPERITY 

the   depreciation  of  the    gold   when    it   reached   the 
countries  receiving  it. 

Many  people  fail  to  understand  why  prominent  men 
in  Congress,  who  should  be  familiar  with  the  money 
question,  favor  the  gold  standard,  if  it  is  maintained 
in  the  interest  of  the  moneyed  class.  Most  of  these 
men  are  either  planning  for  the  presidency  or  for  posi- 
tions of  distinction  in  the  political  arena.  Until  the 
closely  contested  campaign  of  1896,  many  of  them 
avowed  more  or  less  openly  a  preference  for  the  double 
standard.  They  know  that  bimetallists  are  right  in 
demanding  the  free  coinage  of  silver,  regardless  of 
international  agreement.  They  believe,  however,  that 
the  power  of  bankers,  creditors,  and  the  moneyed  In- 
terests generally,  by  the  free  use  of  money,  coercion, 
and  political  influence  will  continue  to  block  all  finan- 
cial legislation  that  tends  to  stop  the  increase  in  the 
value  of  money.  They  are,  therefore,  desirous  of  be- 
ing on  good  terms  with  the  side  which  they  believe 
will  win  the  victory  at  the  polls.  Besides,  they  know 
that  the  money  power  interests  stand  ready  to  pay 
their  campaign  expenses,  and  to  advance  their  political 
fortunes  in  every  way  that  money  and  their  influence 
can  operate. 

It    is    said    that    we    have   been    on    a    gold    basis 
since   1873;    if  so,  twenty-five  years  has  been  quite 


INDEPENDENT   ACTION  123 

long  enouf^h  to  give  it  a  fair  trial.  That  it  has  been 
so  far  a  failure  cannot  be  successfully  controverted. 
Those  who  uphold  the  gold  standard  promise  to  dis- 
card it  as  soon  as  possible  for  international  bimet- 
allism. This  is  not  American  in  spirit.  The  life — 
the  very  existence  of  our  republic  depends  on  an  ade- 
quate volume  of  money.  If  the  gold  standard  ought 
to  be  abandoned  for  international  bimetallism,  and 
as  we  have  been  on  our  knees  to  England  and  other 
European  nations  quite  long  enough  for  our  national 
sense  of  pride,  it  would  seem  a  sensible  thing  for  us 
to  make  our  own  financial  legislation  and  to  cast  out 
the  great  Rothschild-Morgan  gold  octopus,  and  to 
stop  so  far  as  it  is  in  our  power  to  do  so  this  death- 
struggle  for  the  ever-appreciating  gold  dollar.  We 
demand  of  Great  Britain  the  recognition  of  our  Mon- 
roe Doctrine,  and  yet  allow  her  to  dictate  our  financial 
policy. 

If  this  nation  cannot  establish  a  financial  system 
of  its  own,  independent  of  other  nations,  those  who 
framed  our  Constitution  were  in  error  when  they  gave 
the  power  to  Congress  "  to  coin  money  and  regulate 
the  value  thereof"  Our  national  independence,  de- 
clared in  1776,  no  longer  exists  if  we  must  submit  to 
the  dictation  of  the  European  autocrats.  If  we  must 
follow  a  policy  dictated  by  creditor  nations,  then  the 


124  MONEY   AND   PROSPERITY 

work  of  Hamilton  in  framing  the  first  mint  act  of 
1792,  which  was  approved  by  Jefferson  and  Washing- 
ton, was  a  mistake.  We  are  richer  in  natural  re- 
sources than  any  nation  of  the  world.  We  are  a 
great  debtor  nation,  and  we  produce  nearly  one-half 
the  silver  bullion  of  the  world  ;  therefore,  why  should 
we  continue  to  conspire  with  Great  Britain,  the  creditor 
nation  of  the  world,  in  discriminating  against  the  free, 
unlimited  and  independent  coinage  of  silver,  the  money 
of  our  Constitution,  and  persist  in  helping  her  main- 
tain the  single  gold  standard  when  it  is  known  that 
we  could  not  pay  one-tenth  of  our  debts  in  gold  if 
called  upon  to  do  so  ? 

National  and  individual  prosperity,  liberty,  honesty, 
reason,  humanity,  and  civilization  demand  the  restora- 
tion of  the  standard  silver  dollar  to  an  equality  with 
the  gold  dollar  at  the  legal  ratio  of  sixteen  to  one, 
without  waiting  for  the  consent  or  co-operation  of 
any  other  nation. 


THE    END 


UNIVERSITY  OF  CALIFORNIA  AT  LOS  ANGELES 

THE  UNIVERSITY  LIBRARY 
This  book  is  DUE  on  the  last  date  stamped  below 


Form  L-D 

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UNIVERSITY  OF  CALIF0^$^|4 

AT 


562 
L73m 

LittTeton  - 
Money  and 

prosperity''. 

DEMCO  2S4N 

UC  SOUTHERN  RFGinrjAl  I  IRRARY  FACIUTY 


AA    000  593  795    8 


HG 
562 

L73m 


